After finally declining in June, giving the Federal Reserve hopes of pulling off a soft landing at last, one of the central bank’s preferred inflation measures was back on a precipitous rise in July. Headline PCE inflation rose by 3.3% in the year ending in July, up from 3% in June. For the first time since January, core PCE inflation, perhaps the most important inflation measure for the Fed, increased to 4.2%, more than twice the Fed’s maximum target of just 2% inflation on an annual basis.

Dig into the details, and the data only becomes more disappointing. Core services sans housing, a favored inflation measure of both the Fed and the White House, accelerated to a staggering 4.7% in the 12 months ending in July, up from 4.1%. This defies the claim of Raphael Bostic of the Atlanta Fed that “stubborn (and lagging) housing services prices” are solely responsible for core inflation not falling to the Fed’s benchmark.

(via Instapundit)

[The most obvious takeaway here is that the Fed will continue to hike rates. It also underscores that Biden’s historically damaging and sustained inflation has not come to an end. It may have moderated some in 2023, but it’s still around and rising again. It is also eroding wages again too. — Ed]