Core Personal Consumption Expenditures (PCE), which excludes food and energy, held at 3.3% annually
US inflation remained stubbornly high in July, adding pressure on the Federal Reserve as officials weigh their next interest-rate move.
The Personal Consumption Expenditures (PCE) price index rose 3.7% from a year earlier, matching June and staying well above the Fed’s 2% target.
Monthly inflation increased 0.2%, beating economists’ 0.1% forecast. Core PCE, which excludes food and energy, also held at 3.3% annually.
Meanwhile, Americans continued to spend. Personal income increased 0.4%, while consumer spending rose 0.2%.
The broader economy showed signs of strength. Second-quarter GDP growth remained at an annualized 1.5%, while business investment continued to benefit from heavy artificial intelligence spending. Corporate profits also surged by $400.9 billion.
The data could strengthen arguments for keeping rates high in the mid-September Fed meeting.
Markets now say there is a 40% probability of an interest rate hike.