FOMC rate decision scheduled for September 15-16
The Bureau of Economic Analysis released its July personal consumption expenditures report on Wednesday, August 26, showing that core PCE — which strips out volatile food and energy prices — climbed 3.3% from a year earlier. Headline PCE, including those categories, rose 3.7% annually. Both annual readings came in 0.1 percentage points above the Dow Jones consensus estimate.
The report lands about three weeks before the Federal Open Market Committee’s next scheduled meeting on September 15-16, where rate-setters will weigh whether price pressures are cooling fast enough to shift the central bank’s policy stance.
On a month-over-month basis, core PCE rose 0.2% from June, according to the BEA.
The spending side of the report showed consumer outlays rising $36.3 billion, or 0.2%, for the month. Spending on financial services and insurance led the increases at $24.3 billion, followed by $23.2 billion for health care and $16.4 billion for housing and utilities services. Spending on gasoline and other energy goods fell $14 billion — the largest drop in any goods or services category — with recreational goods and vehicles down $13.6 billion and motor vehicles and parts off $9.4 billion.
Personal income rose $115.1 billion, or 0.4%, while disposable income climbed $125.9 billion, or 0.5%. Both measures exceeded the Dow Jones consensus forecast. The income gains, the BEA said, “primarily reflected increases in compensation, government social benefits and personal income receipts on assets.”