US Core PCE Inflation Rises to 4.2% in July, as Expected.
August 31, 2023: US Core PCE Inflation Rises to 4.2% in July, as Expected. The US core Personal Consumption Expenditures (PCE) price index, which excludes food and energy prices, rose 0.2% in July, as expected. The annual inflation rate for core PCE also rose to 4.2%, the highest level since 1991.
The core PCE price index is the Federal Reserve’s preferred measure of inflation. The Fed has said it will continue raising interest rates until inflation comes down to its 2% target.
Several factors, including supply chain disruptions, strong demand, and rising energy prices, drive inflation. The Fed has said that it expects inflation to peak in the coming months and then start to decline.
Actionable Takeaways:
- Consumers should expect to continue to see higher prices for goods and services.
- Businesses should factor in higher inflation costs when setting prices and making business decisions.
- Investors should know the inflation risks and consider adjusting their portfolios accordingly.
Practical Takeaways for Businesses:
- Businesses should review their pricing strategies to ensure they are not losing money due to inflation.
- Businesses should also consider passing on higher costs to consumers, but they should be careful not to price themselves out of the market.
- Businesses should also look for ways to reduce costs, such as negotiating better supplier deals.
The rise in inflation is a challenge for businesses and consumers alike. Companies must be proactive in managing their costs and prices, while consumers must be prepared to pay more for goods and services.
