personal consumption expenditures price index<\/a> posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.<\/p>\nExcluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.<\/p>\n
The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.<\/p>\n
All of the numbers were in line with the Dow Jones consensus forecast.<\/p>\n
Spending and income numbers were slightly higher than expected.<\/p>\n
Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Both were 0.1 percentage point above the respective estimates.<\/p>\n
Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who last week indicated they see two more quarter percentage point reductions before the end of the year.<\/p>\n
The report further indicates that President Donald Trump’s tariffs have had only a limited pass-through effect on consumer prices. Though many economists expected Trump’s expansive levies to juice prices, companies have relied on a mixture of pre-tariff inventory accumulations and cost absorbing measures to limit the impact.<\/p>\n
Moreover, the data showed that consumers have been resilient despite the round of tariffs, continuing to spend strongly as incomes have held up.<\/p>\n
Fed officials including Chair Jerome Powell say a likely scenario for the tariffs is that they are a one-time boost to prices rather than a longer-term cause of underlying inflation. However, some policymakers have continued to express reservations and see limited room for further rate cuts.<\/p>\n
Markets are strongly betting on a rate cut in October, though there’s less enthusiasm for another move in December. The Federal Open Market Committee last week approved a quarter percentage point reduction in the fed funds rate, the first easing of the year that took the benchmark down to a target range of 4%-4.25%.<\/p>\n
This is breaking news. Please refresh for updates<\/strong>.<\/p>\n<\/div>\n<\/div>\n\n
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