Developer's PCE Index Shows Signs of Inflation as Interest Rate Cut Looms in July
Inflation remains largely unchanged in July, but signs of impact from tariffs are seen in the Bureau of Labor Statistics’ Consumer Price Index and the Personal Consumption Expenditure (PCE) index from the Bureau of Economic Analysis (BEA).
The latest data from the Bureau of Labor Statistics and the Bureau of Economic Analysis has revealed that inflation in July was largely flat, in line with expectations. However, signs of impact from tariffs are evident in the Consumer Price Index and the Personal Consumption Expenditure (PCE) index. These two measures are considered primary indicators of inflation, with the PCE index being favored by developers and other industry professionals.
The PCE index, which is favored by developers for its more comprehensive approach to tracking inflation, showed a slight increase in July. However, this increase was within expectations and not significant enough to cause alarm. The overall trend remains relatively flat, indicating that inflation is not a major concern at this time.
However, the data also shows that tariffs are starting to have an impact on inflation. The PCE index showed a higher increase in prices for goods and services compared to the Consumer Price Index, which is a more traditional measure of inflation. This suggests that tariffs are beginning to have an effect on the prices of consumer goods.
In light of this data, many are anticipating a potential interest rate cut in the near future. Developers, in particular, are closely watching this situation as interest rates can greatly impact the cost of borrowing and development projects. With the PCE index showing signs of inflation, a rate cut may be necessary to help offset any potential impact of tariffs on the industry.
“The data is showing that inflation remains largely unchanged, but we are starting to see the impact of tariffs on prices,” said a spokesperson for the Bureau of Labor