For context, the net change in the food and beverages price index over the entire four-year period before the pandemic was only 0.5 percent. Core inflation—inflation excluding volatile food and energy prices—also moderated in July. Core goods PCE inflation decelerated to 0.1 percent month-overmonth in July after averaging 0.5 percent in May and June.
6 While the moderation in monthly inflation is welcome, it will be necessary to see several months of low monthly inflation readings to be confident that inflation is moving back down to 2 percent.