Inflation Stuck at 3.7%, Fed Focused on Taming Prices

US inflation remained at a stubbornly high level of 3.7% in July, outstripping the Federal Reserve's target of 2%. This figure is based on the Personal Consumption Expenditures Price Index (PCE), which rose by 0.2% from June and increased annually to 3.3%.

The PCE inflation rate, excluding food and energy, also rose to 3.3% annually and 0.2% monthly. This core inflation measure is closely watched by the Federal Reserve as it provides a more accurate picture of underlying price pressures in the economy.

Despite this, there are signs that economic growth may be picking up pace. The second-quarter consumer spending growth was revised upwards to an annualized 3.4%, and capital-goods orders rebounded.

Economists believe this data could keep the Federal Reserve focused on containing inflation. Nationwide chief economist Kathy Bostjancic noted that third-quarter real GDP growth appears to be running at least 3%, double the second quarter's unrevised 1.5% rate.