Part 7/12:
Inflation, meanwhile, has experienced nuanced shifts. The impact of higher tariffs on consumer prices is increasingly evident, with the total Personal Consumption Expenditures (PCE) price index rising by 2.6% over the year ending July. Excluding volatile food and energy, core PCE inflation stands at roughly 2.9%. Prices for goods have risen more notably, with a 1.1% increase over the past year, reversing prior declines seen in earlier months.
Contrastingly, housing services inflation continues its downward trend, while non-housing services inflation remains slightly above the Federal Reserve's 2% target. The tariff-induced price increases are expected to continue influencing consumer prices over the coming months, but the timing and magnitude remain highly uncertain.