The individual consumption expenditure index, a major inflation gauge used by the Federal Reserve, was held in July according to the new data of the Department of Commerce in July.
Prices across the US rose at an annual rate of 2.6% last month, in June and in line with economist forecasts. Core inflation, which excludes more unstable food and energy categories, increased by 2.9% a year ago, slightly from 2.8% of June and from February, according to February, Report,
Statistics explain why there are many fed officers Has become careful Regarding their benchmark interest rate cut. While inflation is much lower than about 7% of the summit, which reached three years ago, it is above the 2% target of the Central Bank.
Meanwhile, the report showed that consumer expenses increased by 0.5% from June to July, the biggest growth since March, showing that American is not pulling back on purchasing, despite reducing economic uncertainty. Rapid spent for long -lasting goods such as cars, equipment and furniture, many of which are imported.
Harry Chambers, assistant economist at Capital Economics, said in a research note that the increase in main inflation remedy was due to an increase in core services, which increased by 0.3% on a monthly basis. It suggests that tariffs “have a minimum impact on the prices of goods,” he wrote.
The report showed that income increased by 0.4% on a monthly basis, which has increased by healthy benefits in wages and salary.
“We continue to expect the core PCE inflation to be at 3.3% at the turn of the year at 3.3% at the turn of the year,” said the main American economist Samuel Tombs, the main American economist at Panthon Macroeconomics, reduced to about 2.5% by the end of 2026.
Fed Chair Jerome Powell indicated Jackson hole address earlier this month That policy makers are likely to cut their short -term rate for the first time of December 2024. But policy makers are expected to move carefully, while Powell has emphasized that any future rate cut will depend on the path of inflation.
“Today’s in-line PCE Price Index focused on Jobs Market,” Morgan Stanley Wealth Management Chief Economic Strategist Ellen Zentner said in an email on Friday. “For now, Auds still favor 1 September cut.”
When the Fed reduces its benchmark rate, it often – although not always – reduces the cost of borrowing for things like mortgage, car loan and business borrowings. On the other hand, it can spark inflation if the economy grows very quickly.
