One of the US Fed’s favoured measures of inflation is the change in the core personal consumption expenditures (PCE) price index. After hitting the Fed’s target at 2.0% in mid-2018, the annual rate then hovered in a range between 1.8% and 2.0% through to the end of 2018 before dropping in the first quarter of 2019. Since then, the annual rate has stayed around 1.5% or just above it.
The latest figures have now been published by the Bureau of Economic Analysis as part of the July personal income and expenditures report. Core PCE inflation was +0.2% for the month, the same rate as in June but less than the 0.3% increase which had been expected. On a 12-month basis, the core PCE inflation rate remained unchanged at 1.6%.