The Federal Reserve’s preferred inflation measure, the PCE price index, unexpectedly declined 0.1% in June, the first monthly drop in six years, according to the Commerce Department. Annual headline PCE inflation slowed to 3.7% from 4.1% in May. Core PCE, which excludes food and energy, rose 0.1% month-over-month and 3.3% year-over-year, remaining above the Fed’s 2% target. Both personal income and disposable personal income increased 0.2%, supported by higher compensation, investment income and government benefits. Consumer spending advanced 0.4% in real terms, driven primarily by services, while the personal saving rate stood at 2.7% in June.
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