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This story about the July 2026 PCE inflation report will be updated with further details.
The Federal Reserve’s preferred inflation gauge rose slightly in July as the pace of price growth remained well above the central bank’s target ahead.
The Commerce Department on Wednesday reported that the personal consumption expenditures (PCE) index rose 0.2% from a month ago and was up 3.7% on an annual basis in July. Both figures were hotter than the expectations of economists polled by LSEG, who projected readings of 0.1% and 3.6%, respectively.
Core PCE, which excludes volatile measurements of food and energy prices, was up 0.2% on a monthly basis and is 3.3% higher than last year. Both figures were in line with the estimate of the LSEG poll.
FED’S HAMMACK SAYS MULTIPLE RATE HIKES MAY BE NEEDED TO TAME INFLATION
Federal Reserve policymakers are focused on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Compared with June’s readings, headline PCE remained at 3.7%, while core PCE also stayed at 3.3%.
Goods prices were 1.3% higher than a year ago in July after declining 0.6% on a monthly basis.
Services prices were 2.5% year over year and increased 0.3% from the prior month in July.
