Inflation Remains Above Target Despite Slightly Slowing Pace

The US annual inflation rate remained steady at 3.7% in July, marking the 65th consecutive month above the Federal Reserve's target of 2%. This unexpected pause in decline from a recent peak amid global conflicts is likely to intensify debate over interest rates.

Government data also showed consumer spending decelerating modestly last month, while personal incomes rose faster than inflation. This could indicate an uptick in consumption as the year progresses.

Economists point out that orders of major capital goods rebounded last month, driven by transportation equipment orders, and shipments of durable goods outside defense and aerospace sectors pointed to continued brisk business investment in artificial intelligence space.