US consumers reined in their spending in July as inflation remained stubbornly high, new Commerce Department data showed Wednesday.
Consumer spending, when adjusted for inflation, was flat from the month prior, a sharp slowdown from a 0.4% gain in June, according to the report.
The Personal Consumption Expenditures price index – the gauge used by the Federal Reserve for its 2% target inflation rate – rose 0.2% from June, keeping the annual rate at 3.7%, the report showed.
Economists were expecting the PCE price index to increase 0.1% from the month before and for the annual rate to slow to 3.6%, according to FactSet estimates.
When stripping out volatile energy and food prices, the “core” PCE index rose 0.2% on a monthly basis and was up 3.3% from a year ago.
