Personal consumption expenditures, one of the Federal Reserve’s favorite inflation indicators, slipped on a monthly basis in July and was up less on the year than anticipated. The inflation measure fell 0.1% in July and was up 6.3% on the year, according to the Bureau of Economic. It was expected that the PCE index would be unchanged on a monthly basis in July and up 6.4% on the year. The report also showed that personal income ticked up less than expected, up 0.2% month over month versus an estimated 0.6%. It’s one of the reports the Fed will be watching ahead of its September meeting, when it is likely to raise interest rates again.
The first revision for second-quarter GDP painted a slightly less dour picture for the U.S. economy. The Bureau of Economic Analysis said GDP contracted by 0.6% in the second quarter. The advance estimate released last month showed a decline of 0.9%.
The labor market continues to see strength with initial filings for unemployment benefits falling last week according to the Labor Department. Jobless claims came in 243,000 for the week ended Aug. 20, down 2,000 from the prior week. It was also lower than consensus estimates of 255,000.