US Inflation Holds Above Target Despite Modest Easing

US inflation remains elevated, holding above the Federal Reserve's 2% target for the 65th straight month.

The July reading on personal income rose 0.4%, while spending increased 0.2%, both beating expectations.

The Commerce Department reported that prices for goods and services rose slightly in July, with the annual inflation rate at 3.7% using the personal consumption expenditures price index (PCE) measure.

Core PCE, which strips out volatile food and energy costs, showed a 3.3% annual increase, in line with forecasts.

The Fed's preferred inflation gauge suggests that policymakers may be less inclined to raise interest rates, as core prices rose at the same rate as July 2025.