Aug 26, 2022 - Economy & Business

Fed's favorite inflation gauge shows prices fell in July

Photo: Frederic J. Brown/AFP via Getty Images

Consumer prices fell 0.1% in July, as plunging gasoline prices dragged down a price index that's closely watched by the Federal Reserve.

Why it matters: It's an encouraging sign for the Fed as it wages an intense battle against inflation. Still, even as price gains cool they remain uncomfortably high. Inflation is still up 6.3% compared to this time last year by this measure, the highest in decades.

  • Excluding volatile food and energy costs, the Personal Consumption Expenditures price index ticked up 0.1% last month, a slowdown from the 0.6% rise registered in June.
  • Compared to a year ago, the price index (stripping out food and energy) is up 4.6%.
Go deeper