The personal consumption expenditures price index showed a 12-month seasonally adjusted rate of 2.6% on the headline measure and 2.8% on core excluding food and energy, according to the Commerce Department.

Washington

Newly released US economic data reveals that inflation, as measured by the Federal Reserve’s preferred gauge, has risen more than expected. The personal consumption expenditures (PCE) index showed a month-over-month increase of 0.3%, with the year-over-year rate reaching 2.8%, the highest so far this year. Core PCE, which excludes food and energy, also rose 0.3% month-over-month, matching the highest rate since February.

The Employment Cost Index for the second quarter was higher than forecast, rising 0.9%. Initial jobless claims remained low at 218,000, while continuing claims stayed above 1.9 million. Personal income rebounded slightly, and personal spending increased, though at a slower pace than expected. Despite the hotter inflation readings, market reactions were muted, with only minor changes in bond yields.

Inflation higher than expected, Fed’s preferred gauge shows

Welcome back to Squawk Box, Rick Santelli here live on CME HQ with the breaking news of the morning. We have jobless claims, ECI, Employment Cost Index, and personal income and spending. Let's start with income. Remember, last month we took a ding, minus four-tenths of a percent. That was weakest going back to the fall of 21, rebounding up three-tenths, a tenth better than expected, and that would comp to, well, April when you're up seven-tenths. Now let's look at personal spending, up three-tenths, a tenth light, but a nice reversal before any revisions from the minus one-tenth. Up three-tenths would comp to March when it was also up seven-tenths. Let's look at real spending, accounting for inflation, up one-tenth exactly as expected. Now let's get to the meat of the matter. This is month over month, up three-tenths as expected, but that's still a couple of tenths warmer in the rearview mirror. Up three-tenths, that's the second highest of the year, even though it's the third month, meaning Jan and Feb were both up four-tenths. Those are the high readings. This would be in second place, up three-tenths, so it does comp to the beginning of the year. So even though it's gone up, we've been higher, but it's reversing a bit of a trend. Now let's look at the year-over-year numbers. One-tenth hotter, both rearview mirror and windshield, that's 2.8. That is the highest reading of the year. It equals March of 24. To find a higher read, you're moving into, yes, the fall of 23 when it was 3%. And if we look at the core month over month, on the PCE, up three-tenths exactly as expected, and that would be the warmest since February when we were up half a percent. And finally, year-over-year core, in my opinion, the most important number, that's 2.8. Also, just like the other year-over-year number, it's a little warmer than expected. 2.8 would be the warmest since February when it was 2.9. Now let's look at the employment cost index. You're expecting a number, this is the second quarter number, up eight-tenths, comes in a tenth warmer, up nine-tenths. Nine-tenths would equal the second quarter of 24 to find a higher number. You're in the first quarter of 24 when it was 1%. Initial jobless claims, 218,000. Now that's a low number. We're expecting a number about 8,000, 9,000 higher than that, 218,000 follows 217,000. These are awfully well-behaved numbers. And finally, continuing claims, another week above 1.9 million, 1,946,000, all congested. I suspect that some upside pressure was there for some of the slightly hotter PCE numbers, but it also seems to be, to some extent, something to pay attention to that the market did not really climb aggressively. We're up about a tenth, about one basis point in a ten-year at 434, but that's still down almost three basis points on this session. So even though these were a little warmer, once again, I always like to look at there's both the trend direction of inflation, but there's also where we have been. And in every instance of higher than expected PCE, we have had higher numbers recently. Joe, back to you, buddy.

The announcement comes as international pressure mounts on Israel over the war in Gaza and the deepening humanitarian crisis in the Palestinian enclave.

Ljubljana

Middle East Conflict

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New York

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Kyiv

Ukraine Invasion

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Ottawa

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Jerusalem

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Rio de Janeiro

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Okinawa

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Canberra

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Birmingham

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Hawaii

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The U.N. General Assembly brought high-level officials together to promote a two-state solution to the decades-old Israel-Palestinian conflict. Israel and the United States are boycotting the two-day meeting, co-chaired by the foreign ministers of France and Saudi Arabia

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London

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Bogotá

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Moscow

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Zaporizhzhia

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Breakdown