Included in today's Personal Income and Outlays report from the Bureau of Economic Analysis was the July data on inflation measured by the personal consumption expenditure index. As I reported last month, the Federal Reserve Bank of Dallas is now supplementing the usual report with its own measure of "core" price-level growth, the trimmed-mean PCE inflation rate. Here's the scoop:
The trimmed-mean PCE inflation rate for July was an annualized 2.3 percent.
According to the BEA, the overall PCE inflation rate for July was 3.6 percent, annualized, while the inflation rate for PCE excluding food and energy was 0.7 percent.
On a 12-month basis -- which I prefer to focus on rather than the month-to-month news -- the trimmed mean is showing the same downward drift as the usual PCE ex food and energy measure of core inflation. But the magnitude of the decline in the former is only half that of the latter:
Feb Mar Apr May June July
05 05 05 05 05 05
PCE 2.6 2.7 2.9 2.5 2.2 2.5
PCE
excluding
food & 2.2 2.1 2.0 2.0 1.9 1.8
energy
Trimmed
mean 2.3 2.3 2.2 2.1 2.1 2.1
PCE
In fact, I'd be tempted to conclude that the trimmed-mean is telling us the trend is still holding fairly steady.