The government is about to release two reports that could shape whether interest rates go up again. The Bureau of Economic Analysis will publish its June 2026 inflation and spending report on August 4 at 8:30 AM ET, following another report due today at 8:30 AM ET. Both reports track something called PCE — personal consumption expenditures — which is just a measure of how much prices are changing for the things people buy. It is the Federal Reserve's favorite way to track inflation.

The May 2026 report, published June 25, showed that Americans' spending rose $156.1 billion, or 0.7 percent, for the month, according to the BEA (BEA). Reuters reported the same day that the overall inflation figure topped 4 percent in May, with consumer spending remaining strong (Reuters). The Federal Reserve wants inflation at 2 percent. At 4 percent, it is double that target.

There is also a version of inflation called "core" that leaves out food and energy prices, since those swing up and down a lot and can be misleading. Economists estimate that core inflation was 3.3 percent in June compared to a year earlier, down slightly from 3.4 percent in May, per Reuters reporting on July 14, 2026 (Reuters). They figured this out using another report called the Consumer Price Index, which comes out earlier and gives a preview of what the PCE numbers will likely show.

Another number worth watching is the saving rate — how much of their income people are setting aside rather than spending. In the April 2026 report, covered by Reuters on May 28, the U.S. saving rate dropped to 2.6 percent (Reuters). That is very low by historical standards. It suggests that a lot of recent spending has been funded not by people earning more money, but by dipping into their savings or borrowing more.

What to Watch in Today's Report

Today's release covers June data and is the main event for this period. The August 4 release will cover July data. People in the financial markets will be checking whether the 3.3 percent core inflation estimate holds up. If the number comes in lower than expected, it makes another rate increase less likely. If it comes in higher, a rate hike becomes more likely.

The full May 2026 report is available as a PDF on the BEA website (BEA PDF), including technical notes about how the government adjusts its numbers for seasonal patterns.

The Bigger Picture

The broader context here is that one report does not settle much. Core inflation dropping from 3.4 to 3.3 percent is a small move — measured in tenths of a percent, not a clear shift that would end the debate over what the Fed should do next. Fed officials have not, in the reporting reviewed here, committed to a specific plan. What the May data did show is that inflation above 4 percent overall and above 3 percent on the core measure, combined with strong spending, was enough to keep a rate hike on the table.

The income side matters too. If people's income is not growing as fast as their spending, they are filling that gap by saving less — and the saving rate was already at 2.6 percent in April. If it drops further, that trend can only last as long as people have enough savings and borrowing room to sustain it. If the saving rate bounces back, it would mean consumers are pulling back on spending, which would have its own effects on the economy.

There is an important difference between the overall inflation figure and the core figure. The overall number above 4 percent is pushed up partly by food and energy costs. The Fed pays more attention to the core number when making decisions. If core inflation comes in at 3.3 percent as estimated, that is still about 1 percentage point above the Fed's 2 percent target. It is moving in the right direction, but not fast enough to let the Fed declare victory.

Stock market investors have been treating strong consumer spending as a good sign for the economy. The 0.7 percent spending increase in May supports that view. But where the spending money comes from matters: spending backed by higher wages can continue; spending backed by draining savings cannot. The June report will give the next clue about which of those is really driving things.