PCE Inflation Gauge Slows in June, But Energy Volatility Looms

The Federal Reserve's preferred inflation gauge showed a slowdown in June, as prices pulled back due to volatility in energy markets. The personal consumption expenditures (PCE) index declined by 0.1% on a monthly basis and was up 3.7% from a year ago, meeting the expectations of economists polled by LSEG.

Core PCE, which excludes volatile measurements of food and energy prices, rose 0.1% on a monthly basis and 3.3% from a year ago, slightly lower than the predicted 0.2% increase in core PCE.

Federal Reserve policymakers focus on the PCE headline figure as they aim to bring inflation back to their long-run target of 2%, while viewing core data as a better indicator of inflation.