U.S. Personal Consumption Expenditure Index Sees Moderate Rise in June
July 30, 2023 – The U.S. Personal Consumption Expenditure (PCE) Index saw a moderate increase of 0.2% in June compared to the previous month. However, the year-on-year growth slowed down to 3%. These figures were announced by the U.S. government on Friday, indicating a slight slowdown in inflation.
Economists surveyed by The Wall Street Journal had predicted a 0.2% rise in personal consumption expenditures, which aligns with the reported figures. The slowdown in price growth over the past year was notable, with a decrease from 3.8% to 3%. This is the weakest level since October 2021, suggesting a potential stabilization in prices.
The core PCE inflation rate, considered by the Federal Reserve as a better predictor of future inflation trends, also rose by 0.2% in June. The core inflation rate excludes volatile food and energy costs and provides a clearer picture of underlying inflationary pressures.
Despite the moderate increase, the core inflation rate over the past year decreased from 4.6% to 4.1%. While this is the lowest level in more than two years, it still remains well above the Federal Reserve’s target of 2%.
The latest data reflects the ongoing efforts of the Federal Reserve to manage inflationary pressures and ensure economic stability. By closely monitoring the PCE Index and core inflation rate, the central bank can make informed decisions regarding monetary policy and interest rates.
(This article is translated from MarketWatch. MarketWatch is operated by Dow Jones, the parent company of The Wall Street Journal, but MarketWatch is independent of Dow Jones Newswires and The Wall Street Journal.)