PCE Inflation Rises to 3.7% as Fed Considers Next Moves

Despite the decline in gas prices, inflation remains a persistent issue for Americans. The personal consumption expenditures price index (PCE), a key measure of inflation closely watched by the Federal Reserve, rose 3.7% in July compared to a year earlier, unchanged from June.

This is above the Fed's target of 2%, and marks the fourth month in a row that inflation has been above this level. The PCE index has been pushed higher by the cost of services such as health care, utilities, and financial services, which rose significantly in July.

The Commerce Department plans to adjust its measurement of these costs starting next month, which could lower measured inflation by 0.2 percentage point or so.