The economy still has some wind at its back-and a nagging inflation problem. That's the setup facing Fed Chairman Kevin Warsh ahead of his major address at Jackson Hole on Friday morning.

The Fed's preferred inflation metric, the price index of personal-consumption expenditures, held steady at 3.7% in July, or 3.3% excluding volatile food and energy prices.

The central bank's 2% inflation target, elusive amid price pressures from the Iran conflict, the AI boom and the Trump administration's tariffs, remains frustratingly out of reach.

The better-known consumer-price index showed more moderate July inflation. But due to its different measurement approach, the PCE index has been running much hotter this year.

Meanwhile, economic growth now looks just a bit better than it did before today's revised second-quarter estimate. Consumer spending grew slightly faster in the April-through-June quarter than initially reported. Real final sales to private domestic purchasers, a growth metric that excludes government and trade effects, were revised up to 4.2%.

Initial readings also suggest consumers held onto some momentum through July. Spending last month grew by 0.2%, better than the 0.1% economists had forecast. Personal income rose by 0.4%, an acceleration from June.

Much remains unclear about how precisely Warsh views the inflation challenge he inherited. He has refrained from adding his economic projections to the quarterly dot plot that gathers Fed officials' forecasts, and hasn't weighed in on whether he might favor raising rates at coming meetings, a question that has split his central-bank colleagues.