The PCE price index, the Fed's preferred inflation gauge, rose 0.2% MoM in July
after a 0.1% MoM decline in June and remains above the Fed's target range. Core
PCE (ex food and energy) rose 0.2% MoM in July. PCE typically aligns with market
nowcasts using earlier CPI and PPI subcomponents. Some economists say higher PPI
readings for portfolio management services likely pushed up last month’s core
PCE. The BEA will implement revised statistical methods for those subcomponents
next month, which are expected to ease upward pressure on core PCE.
