BlockBeats report: On July 30, the U.S. June PCE price index fell 0.1% month-over-month, marking the first monthly decline since the outbreak of the pandemic in 2020; the year-over-year increase slowed from May’s three-year high of 4.1% to 3.7%. Core PCE rose just 0.1% month-over-month, with the year-over-year rate declining from 3.4% to 3.3%, though it remains above the Federal Reserve’s 2% target for the sixth consecutive year. The cooling inflation is largely attributed to falling oil prices following the temporary ceasefire agreement between the U.S. and Iran. Consumer spending remained strong: June real consumer spending increased 0.4% month-over-month, matching the highest pace since July 2025. Although the annualized GDP growth rate for the second quarter slowed from 2.1% in the first quarter to 1.5%, domestic private final sales—excluding net exports, inventories, and government spending—rose 3.9%, more than doubling from the first quarter and reaching the highest level since early 2023. Consumer spending, which accounts for about two-thirds of the economy, surged from 0.5% to 3.2%.
Low unemployment, tax cuts, and the AI investment boom have collectively supported household consumption and corporate capital spending. However, energy prices remain a key risk for the second half of the year—the average price of regular gasoline reached $4.22 per gallon in the second quarter, significantly above the under-$3 levels seen before the conflict, and oil prices have risen again this month. Consumer goods companies like Procter & Gamble have observed that consumers are becoming more price-sensitive. The day before the GDP report was released, the Federal Reserve voted 9 to 3 to keep interest rates unchanged at 3.5% to 3.75%; three regional Fed presidents voted against the decision, advocating for a 25-basis-point rate hike. Wash stated that “the economy has demonstrated impressive resilience.” The growing number of hawks highlights intensifying internal divisions.