Analysis: US July inflation remains sticky, Q2 GDP growth unchanged at 1.5%

Odaily News: The US annual inflation rate unexpectedly held steady in July, marking the 65th consecutive month it has remained significantly above the Federal Reserve's 2% target. The pause in the decline from recent elevated inflation levels, impacted by the Iran war, may intensify the internal debate within the Fed over whether to raise rates or hold them steady.

Data released by the Bureau of Economic Analysis on Wednesday showed that the Fed's preferred gauge, the US PCE price index, rose 3.7% year-over-year in July, unchanged from June and slightly above analyst expectations of 3.6%. With trade talks between the US and Canada, its second-largest trading partner, breaking down on Friday, a new wave of tariff-driven inflationary pressures may be on the horizon.

On a month-over-month basis, the PCE price index rose 0.2% in July, also exceeding economist forecasts. In June, the index had declined 0.1% month-over-month, the lowest level since April 2020. The Bureau of Economic Analysis also updated second-quarter economic growth data, keeping the annualized growth rate of real gross domestic product (GDP) unchanged at 1.5%. (Jin Shi)