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US PCE inflation stays sticky at 3.7% while core holds at 3.3%
The July report showed personal income rising 0.4% m/m and core PCE up 0.2% m/m, keeping pressure on the Fed’s near-term policy path.
US inflation remained sticky in July, keeping currency-market attention on the Federal Reserve’s outlook, according to Action Forex. The headline PCE Price Index rose 0.2% month over month, reversing June’s -0.1% reading, and held at 3.7% year over year, slightly above the 3.6% expected.
Core PCE increased 0.2% m/m, up from 0.1% in June, and annual core inflation was unchanged at 3.3%, exactly in line with expectations. ActionForex.com also noted that these core readings matched forecasts, suggesting underlying inflation was not clearly accelerating higher.
The release included firmer household demand data, with personal income growth accelerating from 0.2% to 0.4% m/m and personal spending slowing from 0.3% to 0.2% m/m but still beating expectations. The combination pointed to resilient consumer spending power amid ongoing price pressure, Action Forex said, with the focus now on whether upcoming data strengthen the case for the current policy stance or reopen debate over additional tightening.