Federal Reserve’s Key Inflation Measure Jumps; Incomes Slow

Consumer price pressures were revived in July, according to the Federal Reserve’s key inflation indicator.

A Target customer looks at a display of board games while shopping at a Target store in San Francisco, Calif., on Dec. 15, 2022. Justin Sullivan/Getty Images

The Federal Reserve’s preferred inflation indicator climbed, marking the second consecutive inflationary measure to increase in the past month and revealing that the fight against inflation isn’t over. Incomes also slowed while spending surged, suggesting that the U.S. economy could be on the brink of stagflation, an environment of high prices and stagnating growth.

In July, the personal consumption expenditures (PCE) price index rose to 3.3 percent, from 3.0 percent in June and matching the consensus estimate, according to the Bureau of Economic Analysis (BEA). On a month-over-month basis, the PCE rose by 0.2 percent, unchanged from the previous month.