Inflation watch: Key US price gauge rises as spending moderates

The personal consumption expenditures price gauge, which the US Federal Reserve uses for its inflation target, climbed 0.4 percent from a month earlier and 4.2 percent from July 2020.

U.S. personal spending growth moderated in July, reflecting a slowdown in outlays for merchandise, while a closely watched measure of inflation remained elevated. Purchases of goods and services rose 0.3% following a revised 1.1% increase in June, Commerce Department figures showed Friday. The personal consumption expenditures price gauge, which the Federal Reserve uses for its inflation target, climbed 0.4% from a month earlier and 4.2% from July 2020. The report also showed that income growth accelerated on the heels of an advance disbursement of the child tax credit and a pickup in compensation.