Core inflation rose to 2.9% in July, as expected, key Fed measure shows [View all]
Source: CNBC
Published Fri, Aug 29 20258:31 AM EDT Updated 4 Min Ago
Inflation edged higher in July, according to the Federal Reserve’s preferred inflation measure, indicating that President Donald Trump’s tariffs are working their way through the U.S. economy.
The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate, according to a Commerce Department report Friday. That was up 0.1 percentage point from the June level but in line with the Dow Jones consensus forecast.
On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.
The Fed uses the PCE price index as its primary forecasting tool. Though it watches both numbers, policymakers consider core inflation to be a better indicator of longer-term trends as it excludes the volatile gas and groceries figures. Central bankers target inflation at 2%, so Friday’s report shows the economy still a distance from where the Fed feels comfortable.
Read more: https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html
From the source - https://www.bea.gov/news/2025/personal-income-and-outlays-july-2025
Article updated.
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Published Fri, Aug 29 20258:31 AM EDT Updated 2 Min Ago
Inflation edged higher in July, according to the Federal Reserve's preferred inflation measure, indicating that President Donald Trump's tariffs are weaning their way through the U.S. economy.
The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate, according to a Commerce Department report Friday. That was up 0.1 percentage point from the June level but in line with the Dow Jones consensus forecast.
On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.
The Fed uses the PCE price index as its primary forecasting tool. Though it watches both numbers, policymakers consider core inflation to be a better indicator of longer-term trends as it excludes the volatile gas and groceries figures. Central bankers target inflation at 2%, so Friday's report shows the economy still a distance from where the Fed feels comfortable.
Inflation edged higher in July, according to the Federal Reserve's preferred inflation measure, indicating that President Donald Trump's tariffs are weaning their way through the U.S. economy.
The personal consumption expenditures price index showed that core inflation, which excludes food and energy costs, ran at a 2.9% seasonally adjusted annual rate, according to a Commerce Department report Friday. That was up 0.1 percentage point from the June level but in line with the Dow Jones consensus forecast.
On a monthly basis, the core PCE index increased 0.3%, also in line with expectations. The all-items index showed the annual rate at 2.6% and the monthly gain at 0.2%, also hitting the consensus outlook.
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Original article -
The personal consumption expenditures price index was expected to show core inflation at 2.9% and headline inflation at 2.6%.
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