The core Personal Consumption Expenditures (PCE) price index in the U.S. increased by 0.2% in July 2026, while consumer spending remained flat, according to Bloomberg Markets. This inflation measure, which excludes food and energy, aligns with the Federal Reserve’s preferred gauge for inflation tracking. The year-over-year core PCE stood at 3.3%, matching June’s rate, and the overall PCE also rose by 0.2%. Despite the stable inflation figures, July retail sales fell by 0.6%, reflecting a decline in consumer demand. These developments suggest persistent inflation, which could influence the Federal Reserve’s upcoming decisions on interest rates.
Key Takeaways
The core PCE index’s 0.2% rise in July appears to suggest persistent inflation, impacting the Federal Reserve’s rate decision considerations.
Consumer spending stagnated in July, with retail sales dropping 0.6%, potentially reflecting weaker consumer demand.
Market pricing currently suggests a decreased likelihood of the Federal Reserve cutting rates in the upcoming months.
