July US Inflation Rises Slightly Above Expectations

US inflation has ticked slightly higher in July, according to the Federal Reserve's preferred gauge. The Bureau of Economic Analysis' personal consumption expenditures price index rose 0.2% on the month and 3.7% year-on-year.

This marks a modest increase from June's reading, with both headline and core readings showing slight gains. Core PCE, which strips out volatile food and energy costs, also increased 0.2% on the month and 3.3% annually.

July's report showed personal income up 0.4%, while spending rose 0.2%, both beating expectations. Goods prices fell 0.1%, driven by a drop in gasoline and other energy goods, while services prices climbed 0.3% due to rises in financial services and insurance.

Policymakers are weighing their next move as inflation remains above the central bank's 2% target, despite softer monthly prints over the summer.