U.S. inflation inched higher in August but stayed within a range that economists say is unlikely to prompt immediate action from the Federal Reserve. The Department of Commerce reported that the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 0.3 percent from July and 2.7 percent compared to last year.
Core Inflation Holds Steady
When excluding food and energy costs, the core PCE index showed a 2.9 percent year-over-year increase. That rate was unchanged from July, offering reassurance that broader inflation trends remain under control. Economists say the stability of the core measure supports the Fed’s current approach of prioritizing concerns about the labor market.
Services Costs Remain a Concern
One area drawing closer attention is the cost of services, which climbed 0.3 percent for the second month in a row. Analysts note that if service prices continue rising at this pace, inflation could stay elevated in the short term, complicating the central bank’s efforts to balance price stability with economic growth.
Local Relevance
For households in the San Gabriel Valley, including El Monte, Baldwin Park, and Temple City, the inflation data offers both reassurance and caution. While overall price increases are moderate compared to recent years, rising service costs—such as health care, transportation, and housing-related expenses—remain a pressure point for many families.
At the same time, steadier inflation and a strong consumer base create opportunities for local businesses. Restaurants, shops, and service providers across the Valley benefit when families feel more confident about their spending power. Stable pricing also supports real estate activity, giving buyers and sellers more certainty as they make long-term financial decisions. With inflation showing signs of containment, community leaders are hopeful that local economies will see sustained growth as fall approaches.
The Federal Reserve will continue monitoring these trends in the coming months as it weighs interest rate policy decisions.
For a full report on the PCE index, visit the U.S. Department of Commerce at www.commerce.gov.
