Excluding volatile food and energy costs, so-called core inflation rose 0.2% from June to July, the same as in the previous month.
remained low last month, extending a trend of cooling price increases that clears the way for the Fed to start cutting its key interest rate next month for the first time in 4 1/2 years.
Measured from a year earlier, core prices increased 2.6%, also unchanged from the previous year. Economists closely watch core prices, which typically provide a better read of future inflation trends. With price increases now cooling, Powell also said last week that "the time has come" to begin lowering the Fed's key interest rate. Economists expect a cut of at least a quarter-point cut in the rate, now at 5.3%, at the Fed's next meeting Sept. 17-18. With inflation coming under control, Powell indicated that the central bank is now increasingly focused on preventing any worsening of the job market. The unemployment rate has risen for four straight months.
Friday's report also showed that healthy consumer spending continues to power the U.S. economy. Americans stepped up their spending by a vigorous 0.5% from June to July, up from 0.3% the previous month.
Federal Reserve Interest Rate Core Inflation Consumer Spending Economic Growth Jerome Powell PCE Index
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