Data released Friday by the U.S. Department of Commerce shows inflation rates holding strong. 

What You Need To Know

  • New economic numbers are out that may play a role in the Federal Reserve’s decision when it comes to potentially cutting interest rates

  • The Personal Consumption Expenditures Price Index (PCE Index) data is a measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services

  • The PCE Index rose by 0.2% on a monthly basis in July

  • On a year-over-year basis, the PCE Index rose 2.5%

The department released the Personal Consumption Expenditures Price Index for July. The PCE Index rose by just 0.2% on a monthly basis in July, according to data released by the Bureau of Economic Analysis, which is part of the U.S. Department of Commerce. 

On a year-over-year basis, the PCE Index rose 2.5%.

Mark Schweitzer, an adjunct faculty member at Case Western Reserve University and former research director at the Federal Reserve Bank of Cleveland, said that number is heading toward the Federal Reserve’s target rate of an annual increase of 2%. 

“Today we saw, you know, an inflation number that year-over-year was about 2.5%,” Schweitzer said. “That was pretty much what the market was expecting. So it is part of a gradual decline from, you know, inflation that was clearly too high, gradually heading down towards the Federal Reserve's 2% objective.”

Schweitzer said the report provides additional support for a September interest-rate cut. This is good news for Americans looking to make big purchases like homes and cars. 

“It’s very reassuring to be in this place where we're seeing inflation decline and we're seeing a labor market that, while not quite as strong as a few months ago, is still in a healthy position,” Schweitzer said. 

The Federal Reserve will meet again on Sept. 17 and 18 and will likely decide then whether it will cut the interest rates for the first time in four years. 

More information on the data can be found here.