According to the Ministry of Commerce’s announcement on the 26th (local time), the core PCE price index in July rose 4.6% from the previous year and 0.1% from the previous month. Economists participating in the Dow Jones survey had predicted that the core PCE price would rise 4.8% YoY and 0.2% MoM in July.
Excluding food and energy, which are highly volatile, the core PCE price is the most commonly used indicator by the Federal Reserve to determine price pressure. The Fed’s 2% inflation target also points to the core PCE price index.
Overall PCE prices rose 6.3% in July compared to the previous year, and the pace of growth slowed compared to 6.8% in June. Compared to the previous month, it fell 0.1%. This is the first time this year that the PCE price index has declined from the previous month.
New York Stock Index futures narrowed their losses following the release of PCE price data that showed easing inflationary pressures in the US.
As the US consumer price index (CPI) growth rate in July announced regarding two weeks ago was lower than expected, and the PCE price growth rate also slowed, the view that US inflation is still high but has already peaked is likely to be strengthened.
Meanwhile, Federal Reserve Chairman Jerome Powell is scheduled to deliver a keynote address at the symposium in Jackson Hole, Wyoming, at 8 a.m. local time and 10 a.m. New York time (11 p.m. Seoul time). It remains to be seen what position Chairman Powell will take on inflation and monetary policy.
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