This closely watched inflation measure showed some cooling in July

The Personal Consumption Expenditures price index rose by 6.3% for the year ended in July, down from the 40-year high of 6.8% reported in June, according to data released by the Bureau of Economic Analysis. On a month-over-month basis, the PCE price index fell by 0.1%.
The cool down was largely expected as the July Consumer Price Index, another significant inflation barometer, also showed a slowing in price hikes. The most significant shift: energy prices dropped considerably last month.

The latest BEA data reflects that decline. In June, energy prices were up 43.4% from the year-ago period. Last month, that annual gain was 34.4%.

Despite that decline, prices remain high, said Scott Brave, consumer spending economist for Morning Consult.

“US consumers received a welcome reprieve from the sting of inflation in July, as gas prices dropped significantly,” he said in a statement. “But at over 6%, inflation still remains much too high to provide any lasting comfort.”

Stripping out the more volatile food and energy prices, the core PCE index rose by 4.6% from a year ago.

This story is developing and will be updated.

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