Goldman Sachs sees July core PCE rising 0.23% as focus shifts to Aug. 26 data

Focus remains on the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, as Oxford Economics projects the July headline PCE reading rose 3.6% from a year earlier, down from 3.7% in June. The July report is due later this month. That update adds to earlier expectations from Goldman Sachs that July core PCE would rise 0.23% month on month, with the bank saying methodology changes could make PCE readings more volatile and lower annual core inflation. Goldman also said portfolio management fees could add 8 basis points to the reading, reflecting second-quarter stock market gains, and expects core inflation in August to be close to 0.2%. Oxford Economics said slower services inflation and limited signs of labor-market overheating support its view that the Federal Reserve will keep its benchmark interest rate unchanged for the rest of the year.

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