Fed’s preferred gauge showed core inflation at 3.0% in August, much lighter than expected

Consumer prices posted a smaller than expected increase in August from a year ago, according to the Federal Reserve's primary inflation gauge, the Commerce Department reported Wednesday.The personal consumption expenditures price index increased a seasonally adjusted 0.3% for the month, putting the 12-month gain at 3.4%. Economists surveyed by Dow Jones had been looking for increases of 0.3% and 3.7% respectively.Excluding food and energy, PCE posted a 0.2% increase that put the annual core level at 3%. The respective forecasts were for 0.3% and 3.3%.Though the Fed officially follows the headline PCE number, officials generally consider core a better gauge of longer-term trends.While the annual increases were less than expected, they came as the Bureau of Economic Analysis adjusted the way it computes several components of the index. It was not immediately clear what impact the revisions had on the final numbers.Stock market futures gained ground following the report while Treasury yields were negative. Traders prices in less of a chance of a Fed rate hike in October, pushing the next expected increase to December."This is good news for investors worried about the recent surge in b...