Inflation Edges Down in August, but Remains Above Fed Target
US consumer inflation rose less than expected in August, but remained above the Federal Reserve's target of 2%. The personal consumption expenditures price index increased by 0.3% from July to August and 3.4% year-over-year. Core PCE inflation, which excludes food and energy prices, also came in below forecasts at 3% annual growth.
Energy prices were the largest contributor to inflation in August, with gasoline prices rising 4.4% and transportation services increasing by 1.4%. The central bank has sought to bring annual inflation down to its target for over five years, but has so far been unsuccessful.
The US economy showed continued resilience, with personal income increasing by 0.2% and consumer spending rising by 0.9%. This growth is despite elevated borrowing costs and inflation. The Commerce Department reported that the economy grew at a 2.2% annualized pace between April and June, revised higher from its previous estimate.