Underlying Pace of Inflation Remained Soft In July, Giving Fed Room For Patience on Hikes

Inflation remained muted in July and consumer spending growth slowed, a key government report on household expenditures and prices showed Wednesday.

The personal consumption expenditures price index rose 0.2 percent, higher than the 0.1 percent forecast. The index, which is closely watched by the Fed and used for its inflation forecasts and two percent target, is up 3.7 percent, matching the previous month’s year-over-year measure and slightly above the consensus forecast.

Core prices, a measure that excludes food and energy, rose 0.2 percent compared with a month earlier. That was in line with expectations. Compared with a year ago, core…

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