Inflation continued to run hot in July , underlining the Federal Reserve's dilemma as it looks to lower prices for American consumers while propping up a job market that is starting to wobble.

Prices across the U.S. rose at an annual rate of 2.6% last month, according to personal consumption expenditures data released on Friday. That's the same figure as in June, a sign inflation remains persistent. Stripping out volatile food and energy prices, inflation in July actually ticked up to 2.9% from a year ago, up from 2.8% in June.

Read on for a breakdown of Friday's PCE report.

How are consumers faring?

The latest PCE data shows that consumer spending rose 0.5% in July, suggesting that Americans are continuing to open their wallets even in the face of economic uncertainty.

But while

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