The 12-month overall PCE & core PCE price indices, which the Fed uses for its target, are worse than a year ago. Both the overall PCE price index and the core PCE price index accelerated further year-over-year, and their increases (+2.7% and +2.9%) are now worse than a year ago. Year-over-year, the core services PCE price index accelerated to 3.51%, the second month in a row of acceleration. Two-thirds of consumer spending is for services, and this year-over-year inflation rate of 3.5% powers the overall PCE price index and the core PCE price index. The year-over-year overall PCE price index and the year-over-year core PCE price index form the yard stick that the Fed uses for its 2% inflation target.