An article summarized by Quartz:
The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, fell 0.1% in June, bringing the annual inflation rate down to 3.7% from 4.1% in May. Core PCE, which excludes food and energy prices, rose 0.1% for the month and 3.3% year over year, remaining well above the Fed's 2% inflation target. The decline in headline inflation was largely driven by lower energy prices following a temporary ceasefire between Israel and Iran that caused oil prices to fall.
Despite easing inflation, consumer spending remained resilient. Household spending increased 0.3% in June (0.4% after adjusting for inflation), led by higher spending on services, while personal income and disposable income each rose 0.2%. The personal saving rate stood at 2.7%, reflecting continued consumer activity even as inflation remains elevated.
The inflation report came one day after the Federal Reserve voted to keep interest rates unchanged at 3.5% to 3.75%, despite three officials favoring a rate hike. Fed Chair Kevin Warsh said the cooler June inflation data did not significantly influence the decision, and the recent resumption of fighting involving Iran has raised concerns that lower energy prices, and the improvement in headline inflation, may prove temporary.
