Latest PCE Inflation Data Indicates Persistent Inflation Despite Positive Outlook

Key takeaways

• Headline PCE inflation was at 3.8%, the lowest result since 2021
• However, core inflation only shifted to 4.6% and remains somewhat static
• With unemployment claims dropping, new home sales increasing and GDP growth coming in higher than expected, the Fed clearly has more work to do in tackling inflation

The latest personal consumption expenditures (PCE) price index was yet another mixed bag, with headline inflation looking peachy and core inflation turning sour. Paired with other key economic data sets on jobs, house prices and GDP growth, the economy has proven surprisingly resilient in the face of mammoth interest rate rises.

All of this leaves a lot for the Fed to think about, with the stock market wavering on Monday morning as jobs data later this week could all but confirm a rate increase for July. Here’s the lowdown.