A key measure of inflation accelerated last month to the fastest annual clip since 2012, as robust spending by consumers and businesses steadily pushed up prices for goods and services across the economy.
The personal-consumption-expenditures price index, a broad inflation gauge closely watched by the Federal Reserve, rose a seasonally adjusted 0.1% in July from June, the Commerce Department said Thursday. From July 2017, the index was up 2.3%, the biggest increase since early 2012.
More importantly for the Fed, the so-called core PCE index, which excludes volatile food and energy prices, rose 0.2% in July from June and 2% from a year earlier, matching the central bank’s target. Core PCE prices are seen as an indicator of the economy’s longer-term, underlying inflation rate.
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