US Inflation Holds Firm Amid Brightening GDP Outlook

US inflation remains elevated as GDP growth outlook brightens.

The Personal Consumption Expenditures Price Index increased 3.7% in the 12 months through July, unchanged from June, according to the Commerce Department's Bureau of Economic Analysis.

Economists polled by Reuters had forecast a reading for PCE, which the Fed uses to set its target, of 3.6%. The above-forecast headline print gave a modest lift to expectations that the Fed may raise interest rates as soon as next month.

Orders of major capital goods rebounded last month, led by transportation equipment orders, and shipments of durable goods outside the defense and aerospace sectors pointed to continued brisk business investment in the artificial intelligence space. Corporate profits rose at the second-fastest pace on record in the second quarter.