The personal consumption expenditures (PCE) price index rose 0.2 percent in July, the Commerce Department reported Thursday. Prices are up 3.3 percent from a year ago. In June, they were up 3 percent year-over-year.

“Core” PCE, which excludes relatively volatile food and energy prices, inched up to 4.2 percent from 4.1 percent in June.

Another crucial price measurement, the Consumer Price Index (CPI) also ticked up in July for the first time this year. 

But inflation has steadily declined since its peak last summer, and additional interest rates are not expected at this time.

The Fed has an 88.5 percent chance of pausing rate hikes at its next meeting, according to a prediction algorithm by the financial company CME.

Housing costs, which are directly correlated with the Fed’s interest rate hikes, drove the CPI increase last month. Mortgage rates rise with each uptick in borrowing costs, and housing prices and rents remain stubbornly high.

As prices are on the rise, the PCE showed Americans’ income levels are once again lagging behind inflation.

Personal incomes rose 0.2 percent in July, down from 0.3 percent in June and 0.4 percent in May. Disposable income was flat and down 0.2 percent after adjusting for inflation.

As income levels falls, credit card and revolving consumer debt are back up to pre-pandemic levels topping $1 trillion.

The Hill’s Tobias Burns has more here.