US Inflation Holds Steady at 3.7% Amid Economic Growth Acceleration

US inflation remained elevated in July, holding steady at 3.7% for the 12th consecutive month above the Federal Reserve's 2% target.

The Personal Consumption Expenditures Price Index, which Fed officials use as a guidepost for inflation's underlying run rate, also held steady at 3.3% on the year.

However, consumer spending decelerated modestly last month, while core PCE rose to 0.2% on the month from 0.1% in June, which was a slightly faster increase than expected.

Economists point to an acceleration in overall economic growth in Q3, with Kathy Bostjancic of Nationwide stating that the 'July consumer spending and core durable goods shipments data point to a strong real GDP growth rate' of at least 3%.