United States

Research evidence excerpt

Michael Feroli (1-212) 834-5523

JPMorgan Chase Bank NA

Michael S Hanson (1-212) 622-8603

JPMorgan Chase Bank NA

Abiel Reinhart (1-617) 712 9122

JPMorgan Chase Bank NA

Bennett Parrish (1-212) 622-9003

JPMorgan Chase Bank NA

United States

North America Economic Research

14 August 2026

increased 0.2%. There wasn't much wild movement lurking

below the surface of these calmly-behaved aggregates. One

notable detail was the 3.5% increase in prices for personal

computers and peripheral equipment, the most in over five

years. This likely adds to the angst that the AI buildout isn’t

all positive for the economy.

The July core CPI increased a moderate 0.2%, while

the year-ago measure moved down to 2.5%

However, we think the July core PCE inflation measure may be firm again

Retail sales fell in July, in what we believe is a temporary setback

Figure 1: Headline and core CPI

Next week’s FOMC minutes could shed light on the

Committee’s inflation tolerance

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This week brought the highly-anticipated July set of inflation

reports. The outcome was generally seen as benign, though

with a complicating twist. The CPI increased only 0.1% last

month, and the ex-food and energy core rose 0.2%, in line

with expectations. The PPI was even tamer, with a flat headline reading and the core measure also up 0.2%. The complication comes when we map the components of the CPI and

PPI used to estimate the core PCE inflation measure—the

Fed’s preferred inflation gauge: this exercise points to a firmer 0.3% gain last month. If realized, the year-ago print would

rise to 3.4% in July from 3.3% in June.

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Such a strong core PCE reading might embolden the hawks

on the FOMC. The markets shrugged off this concern, however, with rates lower after the inflation reports were released.

We broadly agree with this assessment. The estimated

strength in last month’s core PCE came in a category that is

subject to doubts about its measurement (more on this below),

which may lead Committee members to be cautious about

hiking into a phantom inflation menace.

The notable data point on growth this week was the July retail

sales report, which came in quite soft, as accurately signaled

by our Chase card data.…