Fed’s preferred inflation measure shows price pressures eased in July

Federal Reserve Board Chairman Jerome Powell speaks to reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., June 15, 2022.

The Bureau of Economic Analysis said Friday that the rate of inflation slowed in July.

The personal consumption expenditures price index was up 6.3% in July, down from 6.8% in June. The index went down in the month.

The core PCE index, which excludes volatile food and energy prices, showed a 4.6% rise year over year and a small gain in July. The core year-over-year reading was expected to be 4.8% by the economists.

The core readings increased in June by 4.8% and 0.6%.

The PCE is used by the Federal Reserve. Fed officials are speaking in Jackson Hole this week as investors look for clues about the next steps in the central bank's rate-hiking cycle. The chair of the Fed is speaking.

Atlanta Fed President Raphael Bostic told CNBC that Friday's report would make him lean towards a half-point rate hike in September, a slowdown from the three-quarters of a point rise the Fed has done in its previous two meetings. Bostic said that there is more economic data that could change his mind.

The PCE reading came about two weeks after the July consumer price index report, which showed a slower-than- expected rise in prices year over year. Some Wall Street strategists said that inflation had probably peaked.

In the report, personal income growth for July came in at. The economists were expecting the two increases to be less than they were.