Fed’s preferred inflation gauge holds at 3.4%

The personal consumption expenditures price index rose 0.3% in August and 3.4% from a year earlier, the Commerce Department said Wednesday. Core PCE, which strips out food and energy, rose 0.2% on the month and 3.0% on the year.

Consumer spending rose 0.9% in August, and the saving rate was 4.1%.

Separately, second-quarter economic growth was revised up to a 2.2% annual rate from 1.5%.

The figures support the case the Fed made for its September hike: growth is holding up and inflation is well above the 2% target, driven by energy.