September’s Fed Inflation Gauge Rose to 3.6%. That Is Not Every Bill.

The Bureau of Economic Analysis said on October 29 that the Personal Consumption Expenditures price index rose 3.6% in September from a year earlier. That is up from 3.4% in both August and July. PCE is the inflation gauge the Federal Reserve emphasizes. It is not the consumer price index already reported at 3.7% for September, and it is not one household’s receipt.

CNBC’s October 30 account said September’s reading was the highest year-over-year PCE rate since May. It also reported that the personal saving rate fell to 3.8% of disposable income in September, from 4.0% in August and 4.5% in July. A lower saving rate means a smaller share of after-tax income was unspent. It does not identify which bill rose, or whether a family drew down savings by choice.

The release did not change the federal funds rate, a mortgage contract, or a store price. A 3.6% annual index change is also not a 3.6% increase for groceries, rent, or gasoline separately. Those pieces can move by different amounts inside the average.

Does 3.6% PCE inflation mean every household bill rose 3.6% in September? No. It is the yearly change in a broad price index. It is not a single bill, and it is not the previously reported 3.7% CPI figure.