June saw a 3% decline in inflation, as reported by the Fed’s key gauge.

Inflation Falls to 3% ⁢Annual Rate in June

The latest report from the Bureau of Economic Analysis⁢ reveals that​ inflation, as measured by the gauge favored by the ​Federal Reserve, has fallen to a 3% annual rate in June. This decline in the personal consumption expenditures​ price index is ​a positive sign that inflationary pressures are easing, thanks to the​ Fed’s efforts to slow down economywide spending by raising interest rates.

While the inflation rate is still higher than the central bank’s goal of 2% annual price​ growth, it is‌ good news‍ for the ‌economy and the Biden administration. The administration has been highlighting positive economic ⁣developments ‍as evidence that ‌President Joe Biden’s agenda is working.

Core PCE Inflation ​at⁣ 4.1% Year-Over-Year Rate

Another key‌ measure of inflation, the core ​PCE inflation, which ​excludes energy and food prices, is currently at ​a 4.1% year-over-year rate. This measure is generally less volatile and provides ⁢further insight⁢ into the state of ⁤inflation.

This latest PCE report follows other recent inflation reports that showed‌ more significant declines than expected by‌ many economists.

The consumer⁤ price ​index also ‌indicates a decrease in inflation, with a 3% annual rate in ‍June, significantly lower than‍ the historic highs​ recorded in June 2022. Additionally, wholesale inflation remains nearly ⁤flat, according to⁤ the most⁢ recent data from June.

These⁤ declines in inflation are accompanied by other positive indicators⁤ in the economy, such as a interest rate hikes until inflation spike”>strong labor market. In June, the economy added ⁤209,000 jobs, and the unemployment‍ rate has remained consistently low at around 3.4%⁢ to 3.7% over the⁣ past year.

President Biden‌ received further encouragement when it was announced that ⁣the gross ⁣domestic ⁢product for the second quarter exceeded consensus expectations. ‌This demonstrates that the economy is thriving despite the Fed’s interest rate hikes,⁣ which are currently at their highest level since the dot-com bubble in 2001.

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The Bureau of Economic Analysis reported that economic ‍growth increased to a 2.4% annual rate in the second quarter of this year, up from ⁣2% in the⁢ previous quarter. This surpassed economists’ expectations of a 1.7% rate.

The Fed recently raised rates, bringing its ​target range to ​5.25% to 5.50%. While there were previous plans for another rate hike ​this year, most investors now believe that the July ​increase will be the final adjustment.