PCE Index Shows Inflation Remained Elevated in July Amid High Energy Costs

The stubborn U.S.inflation problem did not get much worse in July.

It did not get any better, either.Consumer prices were up 3.7 percent in July from a year earlier, according to the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditure price index.That was the same rate as in June, and still well above the Fed’s target of 2 percent annual inflation.Core prices, a measure that strips out the volatile food and energy categories, were up 3.3 percent from a year earlier, also unchanged from June.

Policymakers often focus on the core measure because it can give a more reliable indication of how inflation will behave in the months ahead.On a monthly basis, overall prices were up 0.2 percent in July, reversing a slight decline in prices in June.Core prices also rose 0.2 percent.The data, released by the Bureau of Economic Analysis on Wednesday, highlighted the tricky position Fed policymakers face as they weigh whether to raise interest rates at their meeting next month.Inflation jumped this spring after President Trump led the United States into war with Iran, which pushed up energy prices around the world.

It has eased somewhat since then, and there have been few signs that higher oil prices are filtering through to the economy more broadly, apart from some isolated categories such as airfares.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....