US Fed's preferred inflation indicator rises in July

ISTANBUL

The US Federal Reserve's preferred inflation indicator rose in July on an annual basis, according to Commerce Department figures released Thursday.

The core personal consumption expenditures (PCE) price index rose 4.2% annually in July, up from a 4.1% year-on-year gain in June, and in line with expectations.

The index rose 0.2% in July, after a 0.2% monthly increase in June, also in line with estimates.

"The $144.6 billion increase in current-dollar PCE in July reflected increases of $102.7 billion in spending for services and $41.9 billion in spending for goods," the agency said in a statement.

"Within services, the largest contributors to the increase were financial services and insurance," it added.

On a monthly basis, food prices increased 0.2% and energy prices gained 0.1%, according to the figures. Annually, however, food prices rose 3.5%, while energy prices decreased 14.6%.

The PCE price index, which includes food and energy prices, rose 3.3% in July, after a 3% year-on-year gain in June, coming in line with market estimates.

The index rose 0.2% in July, following a 0.2% month-on-month gain in June, also in line with market expectations.

The Fed, since March 2022, raised interest rates by a total of 425 points in seven hikes last year, which were followed by 25 basis points apiece on Feb. 1, March 22, May 3 and most recently July 26.

Fed Chair Jerome Powell said last week inflation remains too high and the central bank is prepared to raise interest rates further.