The Federal Reserve's favored inflation gauge accelerated slightly in August from a year earlier. The Commerce Department reported Friday that its personal consumption expenditures price index was up 2.7% in August from a year earlier, up from a 2.6% year-over-year increase in July and most since February. Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.

Americans' view of the U.S. economy declined modestly in August as anxiety over a weakening job market grew for the eighth straight month. The Conference Board said Tuesday that its consumer confidence index ticked down by1.3 points to 97.4 in August, down from July's 98.7, but in the same narrow range of the past three months. A measure of Americans' short-term expectations for their income, business conditions and the job market fell by 1.2 points to 74.8, remaining significantly below 80, the marker that can signal a recession ahead. Consumers' assessments of their current economic situation also fell modestly, to 131.2 in August from 132.8 in July.

Federal Reserve Chair Jerome Powell on Friday opened the door ever so slightly to lowering a key interest rate in the coming months but gave no hint on the timing of a move and suggested the central bank will proceed cautiously as it continues to evaluate the impact of tariffs and other policies on the economy. In a high-profile speech closely watched at the White House and on Wall Street, Powell said that there are risks of both rising unemployment and stubbornly higher inflation. Yet he suggested that with hiring sluggish, the job market could weaken further.

Shoppers spent at a healthy pace in July, particularly at the nation's auto dealerships, even as President Donald Trump's tariffs start to take a toll on jobs and lead to some price increases. But the figures also underscore how uncertainty around the expansive duties is pushing shoppers to step up their purchases of dishwashers, furniture and other items ahead of the expected price increases. Retail sales rose a solid 0.5% last month, and June spending was stronger than expected, according to the Commerce Department's report released Friday. June's retail sales were revised upward to 0.9% from the original 0.6% increase, the agency said. The pace in July matched economists' estimates.

U.S. employers slowed hiring last month, but still added a solid 139,000 jobs amid uncertainty over Trump's trade wars. The Department of Labor said Friday that hiring fell from a revised 147,000 in April. The unemployment rate stayed at 4.2%. Trump's aggressive and unpredictable policies — especially his sweeping taxes on imports — have muddied the outlook for the economy and the job market and raised fears that the American economy could be headed toward recession. But so far the damage hasn't shown up clearly in government economic data.

Americans' views of the economy improved in May after five straight months of declines sent consumer confidence to the lowest level since the onset of the COVID-19 pandemic, largely driven by anxiety over the impact of President Donald Trump's tariffs. The Conference Board said Tuesday that its consumer confidence index rose 12.3 points in May to 98, up from April's 85.7, its lowest reading since May 2020. A measure of Americans' short-term expectations for their income, business conditions and the job market jumped 17.4 points to 72.8, but remained below 80, which can signal a recession ahead.

President Donald Trump is badgering the Federal Reserve to cut interest rates, but even if the Fed gave in to the pressure, it wouldn't necessarily lead to lower borrowing costs for consumers. In fact, economists say, Trump's ongoing attacks on Fed Chair Jerome Powell and his tariff policies could keep the longer-term interest rates that matter for consumers and businesses higher than they otherwise would be. A less-independent Fed can lead, over time, to higher borrowing costs.

US Fed Chair Jerome Powell says the Trump administration's expansive new tariffs will likely lead to higher inflation and slower growth. Powell said Friday that the tariffs, and their impacts on the economy and inflation, are "significantly larger than expected." He also said the import taxes are "highly likely" to lead to "at least a temporary rise in inflation," but added that "it is also possible that the effects could be more persistent." Powell's focus on inflation suggests that the Fed will likely keep its benchmark interest rate unchanged at about 4.3% in the coming months.

An inflation gauge closely watched by the Federal Reserve remained high last month even before the impact of most tariffs has been felt. Americans' spending rebounded in February after a fall last month and incomes increased. Friday's report from the Commerce Department showed that consumer prices increased 2.5% in February from a year earlier, matching January's annual pace. Excluding the volatile food and energy categories, prices rose 2.8% compared with a year ago, higher than January's figure of 2.7%. Inflation remains a top economic concern for most Americans, even as it has fallen sharply from its 2022 peak.

The Federal Reserve kept its benchmark interest rate unchanged Wednesday and signaled that it still expects to cut rates twice this year, though more policymakers forecast fewer cuts. The Fed also now expects the economy to grow more slowly this year and next than it did three months ago, according to a set of quarterly economic projections also released Wednesday. It also expects the unemployment rate to tick higher, to 4.4%. Policymakers also expect inflation will pick up slightly by the end of this year, to 2.7% from its current level of 2.5%. Bother are above the central bank's 2% target.