U.S. PCE Inflation Holds at 3.7% as Consumer Spending Rises and GDP Grows 1.5%

U.S. inflation remained elevated in July while consumer spending continued to rise, according to new government data released Wednesday. The Federal Reserve's preferred PCE inflation gauge increased 0.2% from June and 3.7% from a year earlier, while core PCE rose 0.2% monthly and 3.3% annually. Personal income increased 0.4% and consumer spending rose 0.2% in July.

• Headline PCE inflation was 3.7% year-over-year, slightly above the 3.6% estimate, while the monthly 0.2% increase matched expectations.
• Core PCE inflation was 3.3% year-over-year and 0.2% month-over-month, both matching estimates.
• Personal income increased 0.4%, above the 0.2% estimate, while personal spending rose 0.2% versus 0.1% expected.
• Real consumer spending was essentially unchanged in July after increasing 0.4% in June.
• Separately, BEA's second estimate showed real U.S. GDP grew at a 1.5% annualized rate in the second quarter, unchanged from the advance estimate.
• Census Bureau data showed July durable-goods orders rose 1.1%, compared with a 0.5% estimate, while core capital-goods orders increased 0.2%.

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Editor’s Note: This is a developing story. This article may be updated as more details become available.