By Bond Robertson 
Unsurprisingly, personal consumption expenditures inflation rose among Americans in July.
The case is updated!
Up front, analysts believe Bloomberg got just 3.3 percent growth year over year. In comparison subdued Inflated personal consumption expendituresInflated personal consumption expendituresBoth CPI inflation and PCE inflation measure price changes for consumers. However, PCE inflation is broader in scope and takes into account price changes throughout an economy’s output, as well as changes in costs to consumers. Personal consumption expenditures (PCE) rose to 3 percent in June.
Core personal consumption expenditures inflation remained unchanged at 4.2 percent in July. This is the preferred method by which the Fed measures inflation in the United States.
DNB Markets chief economist, Nut A, was not surprised. Magnussen, a lot with Thursday’s numbers.
This was exactly as expected and similar to the CPI numbers two weeks ago. Which is not very exciting considering what the Fed will do in September. Low inflation is an argument for keeping interest rates steady. We think they will in September, but they warned that inflation could pick up again, Magnussen tells E24.
However, what Magnussen thinks is more interesting than the inflation figures themselves, are the consumption figures that were also released at the same time.
– This showed a growth of 0.6 per cent. This is a high number. It just confirms that there is strong demand in the economy. This is a strong start to the third quarter. I think this means that Jerome Powell (Chairman of the Central Bank of the United States of America) will be cautious about declaring victory over inflation, says Magnussen.
Sparebank 1 SR-Bank Chief Economist, Kerry Knudsen, believes that today’s inflation figure is positive news, also from a Norwegian point of view.
The US central bank is the most important in the world, so these are important numbers for the economy and have ripple effects for many other countries. Norway too. We see that inflation has fallen to 3.3 percent, which is good. It is slightly higher than last month, but has been steadily decreasing over the past nine months, Knudsen tells E24.
The highest interest rate in 22 years
At the end of July, Central Bank Governor Powell raised the key interest rate to a range of 5.25 to 5.50 percent – the highest level in the US in 22 years.
The Fed confirmed after raising interest rates that inflation in the United States remains high. The central bank wrote that the committee is firmly committed to returning inflation to the 2 percent target.
This was repeated after the important meeting in Jackson Hole earlier in the month. Currently, the market is leaning towards a rate cut in September.
On Friday comes the “most important number of the month”, i.e. the Non-Farm Payrolls – jobs created outside of agriculture in the US. This will also be important for the Fed in the run-up to the next interest rate decision.
Knut A. Magnussen notes the importance of these matters, and points to a clear decline in the employment rate in recent months.
– There will be employment figures, unemployment figures and an overview of wage growth. The growth rate has obviously decreased. It is now expected to create 170 thousand new jobs. If it drops more than that, that would be confirmation that it has slowed down. But the labor market remains tight as unemployment remains low.
– The Fed wants a job market that is not as overheated as it used to be, says the chief economist.