PCE Index Remains Elevated Amid Ongoing Trade Tensions

An inflation measure closely watched by the Federal Reserve stayed elevated in July, despite a decline in gas prices.

The Commerce Department's report showed that prices rose 3.7% in July compared with a year earlier, matching June's figure.

This is noticeably above the Fed's target of 2%, and inflation has worsened since the US and Israel attacked Iran in late February, when it stood at 2.9%.

The personal consumption expenditures price index, or PCE index, is running hotter than the more widely followed consumer price index, partly because it puts less weight on rental costs, which have been cooling steadily in recent months.