Inflation held steady in July as American households spent more money and saw their incomes rise slightly, according to data release Friday by the Bureau of Economic Analysis (BEA).
The personal consumption expenditures (PCE) price index — the Federal Reserve's preferred way to measure inflation — rose 0.2 percent last month and 2.5 percent over the past year. Both the monthly and annual inflation rates came in close to economists' expectations.
Household incomes also rose 0.3 percent and consumer spending rose 0.5 percent without adjust for inflation. Inflation-adjusted consumer spending still rose 0.4 percent.
The new inflation figures come less than a month before the Fed is expected to cut interest rates at a highly anticipated September policy meeting.
Fed Chair Jerome Powell said last week that "the time has come" for the central bank to begin reducing borrowing costs after keeping them at two-decade highs for more than a year.
The Fed's baseline interest range has been set at 5.25 to 5.5 percent since July 2023.
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