The Federal Reserve’s go-to inflation gauge held at 2.5% in July, Commerce Department data showed Friday. That’s better than anticipated and shows progress — but still underscores the bumpy process for inflation’s descent.
Friday’s report also reaffirmed that the backbone of the US economy — the consumer — is still holding strong. Spending increased 0.5% for the month when Amazon held its annual Prime Day sales event and other large retailers offered competing sales.
The Personal Consumption Expenditures price index was 2.5% for the year ended in July, unchanged from June. On a monthly basis, prices increased 0.2% versus 0.1% the prior month.
Economists had fully anticipated the index would move higher due to “base effects,” where previous data showed faster-than-usual disinflation. Consensus expectations were for PCE to rise by 0.2% for the month and 2.6% for the year.
The core PCE index, a closely watched measure of underlying inflation that strips out the more volatile components of food and energy, held steady as well by rising 0.2% for the month and 2.6% annually.
This story is developing and will be updated.
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