PCE report shows U.S. inflation remained mostly level in July, though some prices edged up
Prices rose at an annual pace of 2.6% in July, the same rate as the previous month and in line with economist forecasts.
www.cbsnews.comHere’s the latest on the PCE report, based on the most recent publicly reported releases.
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What PCE is: The Personal Consumption Expenditures price index is the Federal Reserve’s preferred inflation measure, tracking changes in what households buy and how much they pay for them. It’s closely watched for signals on inflation trends and monetary policy .
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Latest headline: In recent months, the PCE inflation rate has moved toward the Fed’s 2% target, with the headline and core readings showing modest deceleration or stability toward that target, though readings can bounce month to month depending on energy, food, and services components .
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Core PCE: The core PCE (which excludes food and energy) often shows a steadier path and is a primary focus for the Fed’s policy stance. Recent releases have shown core inflation hovering near the middle of the Fed’s target range, with readings that have supported expectations for slower policy tightening or potential holds/cuts depending on the broader labor market and other inflation signals .
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Market expectations: Following PCE releases, traders commonly adjust bets on the pace of Federal Reserve rate changes. When PCE trends toward 2% or a bit above, market pricing often shifts to anticipate slower hikes, potential pauses, or modest cuts, contingent on the broader data mix including labor conditions and other inflation gauges .
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What to watch next:
- Sequential PCE readings (month-over-month changes) and the year-over-year rate for both headline and core measures.
- The broader CPI readings and labor market data, since these interact with PCE signals to shape Fed policy expectations.
- Any revisions to previously reported figures, as BEA sometimes backcasts or revises estimates with new data .
If you’d like, I can pull the very latest precise figures (headline and core PCE percent changes, month-over-month and year-over-year) and summarize them in a short table. I can also provide a quick chart visual if you want.