Inflation held steady in July as U.S. households increased spending and saw their incomes rise slightly, according to data released Friday by the Bureau of Economic Analysis.
The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred way of measuring inflation, rose 0.2% last month and 2.5% over the past year. Both the monthly and annual inflation rates were close to what economists had expected.
Household income also rose 0.3%, and consumer spending, not adjusted for inflation, rose 0.5%. Adjusted for inflation, consumer spending still rose 0.4%.
The new inflation data comes just under a month before the Fed is expected to cut interest rates at its September policy meeting.
Fed Chairman Jerome Powell said last week that “it's time” for the central bank to start lowering borrowing costs after keeping them at their highest in two decades for more than a year.
The Federal Reserve's benchmark interest rate range is set at 5.25% to 5.5% from July 2023 onwards.
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