Core Prices Rose at 2.1% Annualized Rate in July
Washington, DC, August 31, 2023-Personal income increased $45.0 billion (0.2% at a monthly rate) in July, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $7.3 billion (less than 0.1%), and personal consumption expenditures (PCE) increased $144.6 billion (0.8%).
The PCE price index increased 0.2%. Excluding food and energy, the PCE price index increased 0.2%. Real DPI decreased 0.2% in July and real PCE increased 0.6%; goods increased 0.9% and services increased 0.4%.
"The Fed's preferred gauge of consumer prices, the personal-consumption expenditures price index, rose 0.2% in July from a month earlier, the same pace as June," reports the Wall Street Journal. "So-called core prices, which exclude volatile food and energy categories, rose at the same rate. Economists see core inflation as a better predictor of future inflation than overall inflation. Inflation ran at 2.1% annualized rate over the three months through July, close to the Fed's 2% target. Core prices rose at a 2.9% rate over the previous three months, the lowest such reading since January 2021."