A US inflation metric closely monitored by the Federal Reserve fell last month, offering further evidence of cooling prices.
The personal consumption expenditures, more commonly known as the PCE price index, rose 3 per cent on an annual basis for June, down from 3.8 per cent in May, the Commerce Department reported on Friday. It is the lowest annual level since March 2021.
Month-by-month, PCE increased 0.2 per cent.
Core PCE – which excludes food and energy – rose by 4.1 per cent last month, down from 4.6 per cent in May. It also gained 0.2 per cent on a monthly basis. It also increased 0.2 per cent month-by-month.
The Fed closely monitors PCE inflation for its monetary policy decisions.
Prices for goods slipped 0.1 per cent in June while services rose 0.3 per cent. Food prices fell by 0.1 per cent and energy prices increased 0.6 per cent.
Consumer spending rose 0.4 per cent. Data released by the Labour Department on Thursday showed that consumer spending grew by 1.6 per cent in the second quarter.
Friday's report is the latest sign that prices are continuing to cool since the Fed began raising interest rates last year. The Consumer Price Index (CPI) inflation sits at 3 per cent after a 9.1 per cent peak last summer.
Further signs of deceleration could add to hopes that the Fed will not raise interest rates again this year.
After raising rates by a quarter percentage point on Wednesday, the Fed's chairman Jerome Powell remained coy on if the reserve plans to increase rates further this year, going only so far as to say the central bank would take a data-driven approach “meeting by meeting”.
Mr Powell said he does not expect inflation to fall to the Fed's 2 per cent goal until 2025.
This week's decision brought the Fed's benchmark rate to the target range of 5.25 per cent and 5.5 per cent, its highest level in more than two decades. The central bank hopes raising interest rates will slow economic activity without bringing on a recession, otherwise known as a soft landing.
Still, the labour market remains tight and unemployment remains at a near-historic low, complicating their efforts.
Traders expect the Fed to keep rates steady for the remainder of the year.
White House updates economic forecasts
Updated economic forecasts released by the White House on Friday showed that Consumer Price Index inflation is forecast to end the year at 3.3 per cent, slightly above June's 3 per cent reading.
It is expected to remain above the Fed's 2 per cent target by end of 2024 at 2.5 per cent before a long-run 2.3 per cent rate.
Revised down was the White House's unemployment forecast, reflecting greater confidence that the labour market will remain tight this year. The Office of Management and Budget now expects unemployment to reach 3.8 per cent be end of 2023, as opposed to its March estimate of 4.3 per cent.
The White House expects unemployment to reach 4.4 per cent next year before winding down slightly in 2025.
Meanwhile, real gross domestic product is expected to be at 0.4 per cent in 2023 and 1.8 per cent at the end of 2024.
The 2023 deficit is expected to grow to $1.543 trillion, a $26 billion decrease from its previous estimate. The White House said this was largely due to the Supreme Court's ruling to strike down Mr Biden's student loan forgiveness programme.
Bombshell
Director: Jay Roach
Stars: Nicole Kidman, Charlize Theron, Margot Robbie
Four out of five stars
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
Power: 575bhp
Torque: 700Nm
Price: Dh554,000
On sale: now
The specs
Engine: Turbocharged four-cylinder 2.7-litre
Power: 325hp
Torque: 500Nm
Transmission: 10-speed automatic
Price: From Dh189,700
On sale: now
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
The Indoor Cricket World Cup
When: September 16-23
Where: Insportz, Dubai
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
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Turning%20waste%20into%20fuel
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The biog
Name: Atheja Ali Busaibah
Date of birth: 15 November, 1951
Favourite books: Ihsan Abdel Quddous books, such as “The Sun will Never Set”
Hobbies: Reading and writing poetry
The specs: 2018 Bentley Bentayga V8
Price, base: Dh853,226
Engine: 4.0-litre twin-turbo V8
Transmission: Eight-speed automatic
Power: 550hp @ 6,000pm
Torque: 770Nm @ 1,960rpm
Fuel economy, combined: 11.4L / 100km
WWE Super ShowDown results
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Shane McMahon defeated Roman Reigns
Lars Sullivan won by disqualification against Lucha House Party
Randy Orton beats Triple H
Braun Strowman beats Bobby Lashley
Kofi Kingston wins against Dolph Zigggler to retain the WWE World Heavyweight Championship
Mansoor Al Shehail won the 50-man Battle Royal
The Undertaker beat Goldberg