July 26 (UPI) — The Federal Reserve‘s preferred inflation gauge slowed again in June, according to data released Friday, presenting another sign of easing inflation.
The personal consumption expenditures price index, or PCE, was up 1% in June from the previous month and 2.5% from its level at the same time in 2023, the Bureau of Economic Analysis reported.
Both figures were in line with predictions by Dow Jones economists. The June figure is slightly smaller than the 2.6% increase in May. The figure will be examined by the Federal Reserve when discussing a possible rate interest rate reduction despite not yet reaching its targeted 2% growth benchmark.
The report said that disposable personal consumption, personal income less personal current taxes, increased $37.7 billion, or 0.2%. The PCE price index increased 0.1% overall and 0.2% when more volatile food and energy are removed.
Real DPI increased 0.1% in June and real PCE increased 0.2%. Goods jumped 0.2% while services increased 0.2% for the month.
“A two-word summary of the report is, ‘good enough,'” Robert Frick, corporate economist with Navy Federal Credit Union, told CNBC. “Spending is good enough to maintain the expansion and income is good enough to maintain spending, and the level of PCE inflation is good enough to make decisions to cut rates easy for the Fed.”
The year-to-year inflation rate continued to slow down this month, falling to 2.5% in June from 2.6% in May and 2.7% in April.
The report said the increase in current-dollar personal income in June reflected increases in compensation and personal current transfer receipts.
The largest drivers of increases in the services sector were international travel and housing. Within goods, the leading increase contributors were nondurable goods such as pharmaceuticals and other medical products and recreational goods.
Those were offset by decreases in motor vehicles, gasoline and other energy goods.