PCE Inflation Remains Elevated Amid Ongoing Trade Tensions and Iran Conflict

The personal consumption expenditures price index (PCE) remained elevated in July, showing that inflation is still a major concern for many Americans. The PCE index rose by 3.7% compared to a year earlier, the same as June's figure. This is above the Federal Reserve's target of 2%, and has worsened since the US and Israel attacked Iran in late February.

The Commerce Department reported that gas prices have rebounded this month, which will likely push up inflation when the August figures are reported next month. Prices ticked up again overnight to $4.10 per gallon on average nationally, according to AAA.

Despite some cooling of rental costs and a decline in food prices, core inflation remained unchanged at 3.3% in July. The Fed's target for core inflation is about 0.2% a month, which would be a reassuring sign that inflation is heading back down.