Aug. 30 (UPI) — The personal consumption expenditures index, the Federal Reserve’s preferred inflation gauge rose in line with analysts’ expectations, according to Commerce Department data released Friday.
The PCE index rose 0.2% in July but remained off from the Federal Reserve year-to-year benchmark, jumping 2.5% from the same time a year ago.
Core PCE, which excludes volatile food and energy prices also remained stubbornly higher than the Fed’s 2% inflation goal standard, settling at 2.6% over the past 12 months. That was just slightly under the 2.7% increase the month before.
“The $103.8 billion increase in current-dollar PCE in July reflected an increase of $59.3 billion in spending for services and $44.5 billion in spending for goods,” the Commerce Department report said. “Within services, the largest contributor to the increase was housing and utilities.
“Within goods, the largest contributors to the increase were motor vehicles and parts as well as food and beverages.”
The report said that personal interest payments and personal current transfer payments increased by $103.3 billion in July. Personal savings were $598.8 billion in July and the personal saving rate — personal savingas a percentage of disposable income — was 2.9%.
While other indexes have led Federal Reserve Chair Jerome Powell to hint at an interest rate cut next month, 2.5% annual figure, which met the expectations of Wall Street economists, will play a role in deciding if the Fed to cut by one-quarter percent or more.