The US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation measure, remained steady at a 3.7% annual pace in July, slightly higher than economists' expectations of 3.6%. The month-over-month PCE figure also came in higher than expected at 0.2%. Core PCE, which excludes volatile food and energy prices, held steady at 3.3% annually, unchanged from June.
Key Takeaways
The US Personal Consumption Expenditures (PCE) Price Index remained at 3.7% annually in July, slightly above expectations and well above the Federal Reserve's target of 2%. Core PCE, excluding food and energy, held steady at 3.3%. The data has increased the likelihood of a Fed rate hike in September.
- US inflation remains at 3.7%, higher than expected
- Core PCE unchanged at 3.3% annually
- Probability of September rate hike rises to 42-44%
- Consumer spending shows mixed trends with goods down, services up
- Fed Chairman Warsh to speak at Jackson Hole symposium
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▼Source Claims Check
High ConsensusAll 6 publishers report consistent facts across 7 key claims.
| Claim | Status | Reason | |
|---|---|---|---|
| Annual Pce Rate | Broad Agreement | 3.7% annual pace in July | |
| Monthly Pce Change | Broad Agreement | 0.2% month-over-month increase | |
| Core Pce Rate | Broad Agreement | 3.3% annually, unchanged from June | |
| Rate Hike Probability | Broad Agreement | 42-44% for September meeting | |
| Consumer Spending Goods | Broad Agreement | $49.9 billion decline in goods spending | |
| Consumer Spending Services | Broad Agreement | $86.2 billion increase in services spending | |
| Q2 Gdp Growth | Broad Agreement | 1.5% clip in the second quarter |
Annual Pce Rate
Broad Agreement3.7% annual pace in July
Monthly Pce Change
Broad Agreement0.2% month-over-month increase
Core Pce Rate
Broad Agreement3.3% annually, unchanged from June
Rate Hike Probability
Broad Agreement42-44% for September meeting
Consumer Spending Goods
Broad Agreement$49.9 billion decline in goods spending
Consumer Spending Services
Broad Agreement$86.2 billion increase in services spending
Q2 Gdp Growth
Broad Agreement1.5% clip in the second quarter
This analysis is AI-generated and may not perfectly represent each source's reporting. Always read the original articles for full context.
The persistent inflation data has intensified the Federal Reserve's debate over whether to raise interest rates or hold them steady. Fed funds futures now reflect about a 42-44% probability of a rate hike at the central bank's September 15-16 meeting, up from around 36% before the report.
Consumer spending showed signs of fatigue due to higher prices, with goods spending declining by $49.9 billion. However, services spending increased by $86.2 billion. The US economy expanded at a sluggish 1.5% clip in the second quarter, in line with earlier estimates.
Inflation has worsened since the US and Israel attacked Iran in late February, when it stood at 2.9 percent. The annual PCE shot to a three-year high of 4.1 percent in May with energy prices spiralling upwards as the conflict closed off roughly a fifth of global oil supplies.
The data showed that compared with a year ago, inflation-adjusted incomes have risen just 0.2 percent after several months of declines. Petrol prices have rebounded this month, which will likely push up inflation when the August figures are reported next month. Prices ticked up again overnight to $4.10 per gallon on average nationally.
Fed Chairman Kevin Warsh is scheduled to deliver an address at the Jackson Hole symposium on Friday, where investors will look for clues about the central bank's next steps regarding interest rates and inflation control.
How this summary was created
This summary synthesizes reporting from 6 independent publishers using AI. All sources are cited and linked below. NewsBalance is a news aggregator and media literacy tool, not a news publisher. AI-generated content may contain errors or inaccuracies — always verify important information with the original sources.