The Federal Reserve’s preferred inflation metric is expected to show a slight tick-up in price pressures in July, which could help convince the US central bank to shy away from delivering a larger than usual half-point cut in interest rates when it meets next month.
On Friday, the Bureau of Economic Analysis will release the personal consumption expenditures index data for July, which economists surveyed by Reuters forecast will show the headline figure at 2.7 per cent year-over-year, up from 2.6 per cent the month prior. The core measure, which strips out the volatile food and energy sectors and is most closely watched by the Fed, is expected to be 2.6 per cent, a step up from the 2.5 per cent rate in June.
The PCE data will follow positive consumer price data earlier this month, which showed inflation at 2.9 per cent in July, below economists’ expectations and under 3 per cent for the first time since March 2021.