US Inflation Remains Stubbornly High Despite Cooling Gas Prices

Inflation remains stubbornly high in the US, according to a recent report from the Commerce Department. The personal consumption expenditures price index (PCE), a closely watched gauge of inflation, rose 3.7% in July compared with a year earlier, matching June's rate. This puts inflation above the Federal Reserve's target of 2%, and marks a worsening trend since the US and Israel attacked Iran in late February.

Despite a decline in gas prices, the cost of services such as health care, utilities, and financial services jumped in July, contributing to the high inflation rate. The government plans to change the way it calculates the cost of some services starting with next month's figures, which could lower measured inflation by 0.2 percentage point.

Excluding food and energy categories, core inflation remained at 3.3% in July, unchanged from June. Some Fed officials have said that core inflation running at about 0.2% a month would be a reassuring sign that inflation is heading back to the 2% target.