PCE Report Shows U.S. Inflation Stability in July
Inflation Stability in July: A Look at the PCE Report
The Personal Consumption Expenditures (PCE) index, a critical inflation gauge, showed that U.S. inflation remained steady in July. According to data from the Department of Commerce, prices rose at an annual rate of 2.6%, unchanged from June and aligning with economist expectations.
Core Inflation Trends
Core inflation, which excludes volatile food and energy prices, grew by 2.9% year-over-year, a slight increase from June's 2.8%, marking the highest level since February. This instability raises concerns among Federal Reserve officials regarding further cuts to the benchmark interest rate.
Consumer Spending Insights
- Consumer spending saw a notable increase of 0.5% from June to July, hinting at ongoing consumer confidence.
- This marks the largest jump in spending since March, primarily driven by demand for long-lasting goods.
- Harry Chambers, assistant economist at Capital Economics, notes that the rise in core inflation is attributed to a 0.3% increase in core services.
The figures reflect an economy where inflation, while still elevated compared to the Fed's 2% target, is significantly lower than the peak of approximately 7% reached three years ago.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.