US inflation remains sticky in July; 2nd-quarter GDP unrevised at 1.5%
Annual US inflation unexpectedly held steady in July well above the Federal Reserve's 2% target for the 65th straight month, and the pause in the decline from a recent Iran-war induced peak is li...
In July, US inflation remained stubbornly high, staying above the Federal Reserve's 2% target for the 65th consecutive month. The Personal Consumption Expenditures Price Index (PCE) rose by 3.7% over the past year, matching the increase seen in June. Economists had anticipated a PCE reading of 3.6% for July. Meanwhile, the Commerce Department's Bureau of Economic Analysis (BEA) reported that the second-quarter GDP growth remained unchanged at an annualized rate of 1.5%.
In May, PCE hit a three-year high of 4.1%, driven by escalating energy prices following the US and Israel's military strikes on Iran in late February. The conflict, though less intense six months later, continued to contribute to inflationary pressures. Despite the recent decline in inflation, some Federal Open Market Committee members remain divided on whether interest rates should be increased to curb inflation, which has persisted above the target since February 2021.
The recent escalation in US-Canada trade tensions due to the collapse of trade negotiations and new tariffs on Canadian goods is expected to further complicate the economic landscape.
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