Business & Finance

July PCE inflation held at 3.7% annual rate, slightly above expectations

The Federal Reserve's preferred inflation metric remained unchanged from June, while personal income and consumer spending both increased.

Updated Aug 26, 2026 · 13:45 UTC2 reports

The short version

The Personal Consumption Expenditures price index held at a 3.7% annual pace in July, slightly exceeding Wall Street expectations.
Core inflation, which strips out food and energy costs, rose 3.3% from a year ago in line with forecasts.
Personal income and consumer spending both gained ground, exceeding expectations despite elevated interest rates.
Federal Reserve policymakers will consider the data at their next official rate-setting meeting scheduled for September 15-16.

The personal consumption expenditures (PCE) price index rose 0.2% in July, bringing the annual rate to 3.7%.[CNBC · CBS News]
The annual headline PCE reading came in 0.1 percentage point higher than forecasts from surveyed economists.[CNBC · CBS News]
Core PCE, which excludes food and energy prices, increased 0.2% on the month and 3.3% annually.[CNBC]
Personal income rose 0.4% and personal spending increased 0.2% in July, both outpacing expectations.[CNBC]
Goods prices decreased 0.1% in July due to drops in energy goods and furnishings, while service prices rose 0.3%.[CNBC]

Financial market pricing reflects uncertainty over whether the Federal Reserve will raise interest rates in September or wait until December.[CNBC]
Market participants remain doubtful whether recent Treasury buyback initiatives will lower government bond yields.[CNBC]