WASHINGTON (dpa-AFX) - Consumer prices in the U.S. increased in line with economist estimates in the month of July, according to closely watched data released by the Commerce Department on Friday.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in July after climbing 0.3 percent in June. The uptick matched expectations.
The annual rate of growth by the PCE price index in July came in unchanged from June at 2.6 percent, which was also in line with estimates.
The modestly monthly increase by consumer prices came as prices for services climbed by 0.3 percent, more than offsetting a 0.1 percent dip in prices for goods.
Excluding food and energy prices, the core PCE price index rose by 0.3 percent in July, matching the increase seen in June as well as expectations.
The annual rate of growth by the core PCE price index ticked up to 2.9 in July from 2.8 percent in June. The slight acceleration also matched estimates.
'Inflation is increasing ever so slightly, but right in line with forecasts and this morning's PCE data should only increase the probability of a Fed rate cut next month,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'There are another two important inflation reports before next month's meeting - PPI and CPI on 9/10-9/11 - but as long as those reports don't show a huge spike in inflation, the Fed will be almost guaranteed to cut interest rates by 0.25% on 9/17.'
The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.
The report said personal income climbed by 0.4 percent in July after rising by 0.3 in June. The increase came in line with expectations.
Disposable personal income, or personal income less personal current taxes, also increased by 0.4 percent in July after climbing by 0.3 percent.
The Commerce Department said personal spending grew by 0.5 in July following a 0.4 percent increase in June, which also matched estimates.
Excluding price changes, real personal spending rose by 0.3 percent in July after inching up by 0.1 percent in June.
The report said personal saving as a percentage of disposable personal income in July came in unchanged from the previous month at 4.4 percent.
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