US Inflation Eases, but Core Prices Rise as Spending Stalls

US consumer inflation eased in July, but core prices rose as household spending stalled. The Joint Economic Committee's monthly expenditure update showed that the headline personal consumption expenditures price index increased by just 0.16% between June and July, which is below the 0.40% monthly increase recorded in June.

However, the underlying measure, or core PCE inflation, accelerated to 0.25% in July from 0.13% a month earlier. This presents a mixed picture for the US economy, with overall monthly inflation moderating but underlying price pressures accelerating and remaining above the Federal Reserve's longer-term goal of 2%.

The report also showed that household expenditure was nearly flat during the month, with inflation-adjusted personal consumption expenditure increasing by just 0.01%. Real spending on services rose by 0.29%, while spending on goods fell by 0.61%. The US economy continued to expand in the second quarter, but at a slower pace of 1.48% from the first to the second quarter of 2026.