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Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July
CNBC • • general
Key Points:
- The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index, rose 0.2% in July, with an annual inflation rate of 3.7%, slightly above expectations.
- Core PCE, which excludes volatile food and energy prices and is closely watched by policymakers, also increased 0.2% monthly and 3.3% annually, aligning with forecasts.
- Personal income and spending both rose more than expected in July, with income up 0.4% and spending up 0.2%, while goods prices declined due to lower energy and household equipment costs.
- Services prices increased 0.3%, driven by higher costs in financial services, insurance, and housing, contributing to ongoing inflation concerns above the Fed's 2% target.
- The Federal Open Market Committee will not meet in August, with markets anticipating a possible rate hike in December, while Fed officials gather at the Jackson Hole symposium for policy discussions amid rising Treasury yields and fiscal concerns.
