US inflation showed little relief in July, with the Personal Consumption Expenditures price index — the Federal Reserve’s preferred inflation gauge — rising 3.7% year over year, unchanged from June and above analysts’ 3.6% forecast, according to data released Wednesday by the Bureau of Economic Analysis. The reading marked the 65th straight month that inflation has remained clearly above the Fed’s 2% target. On a monthly basis, the PCE price index rose 0.2% in July, also topping economists’ expectations, after falling 0.1% in June, which had been the lowest monthly reading since April 2020. The Bureau of Economic Analysis also left second-quarter real GDP growth unchanged, with the annualized expansion rate holding at 1.5%. BlockBeats, citing Jin10, said the recent disinflation trend has stalled after inflation moved higher, and that could intensify internal debate at the Federal Reserve over whether to raise rates again or keep them unchanged. The report also noted that trade talks between the US and Canada broke down on Friday, potentially setting up another round of tariff-driven inflation pressure.
US inflation remained sticky in July, with the Personal Consumption Expenditures price index, the Federal Reserve’s preferred gauge, rising 3.7% from a year earlier, unchanged from June and above analysts’ 3.6% estimate, according to data released Wednesday by the Bureau of Economic Analysis.
The reading marked the 65th consecutive month that inflation has stayed clearly above the Fed’s 2% target. BlockBeats, citing Jin10, said the recent pullback in inflation has stalled after prices climbed to elevated levels, a trend linked in the report to the Iran war. That may sharpen internal debate at the Fed over whether to raise interest rates or leave them unchanged.
Monthly PCE reading also came in above expectations
On a month-over-month basis, the PCE price index rose 0.2% in July, also higher than economists had expected. In June, the index had fallen 0.1%, its lowest monthly reading since April 2020.
Second-quarter GDP growth left unchanged
The Bureau of Economic Analysis also updated its second-quarter growth figures, leaving US real gross domestic product growth unchanged at an annualized rate of 1.5%.
Breakdown in US-Canada trade talks could add pressure
The report added that trade negotiations between the US and Canada, its second-largest trading partner, broke down on Friday. That could bring a fresh round of tariff-driven inflation pressure.
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