US Inflation Cools, But Underlying Price Pressures Persist

The US inflation rate cooled in July, but underlying price pressures accelerated and remained above the Federal Reserve's target. The Joint Economic Committee's monthly expenditure update showed that the headline personal consumption expenditures price index rose by 0.16% between June and July, below the 0.40% monthly increase recorded in June.

However, core PCE inflation, which excludes food and energy categories, increased by 0.25% in July, a higher rate than the 0.13% rise in June. The figures present a mixed picture for the US economy, with overall monthly inflation moderating but underlying price pressures accelerating.

Over the 12 months ending in July, headline PCE inflation stood at 3.70%, slightly higher than the 3.67% annual rate registered in June and above the Federal Reserve's 2% target. The PCE index is closely watched because it reflects changes in household purchasing patterns as people respond to rising or falling prices.