It might seem counterintuitive to think that the economy needs higher inflation. Still, that’s the current thinking. The problem is that the economy just is not getting enough inflation considering the expansion that has been seen. The Federal Reserve has a 2.0% to 2.5% inflation target. It is this rate that will allow Federal Reserve Chair Yellen and the Federal Open Market Committee members to raise interest rates.

After years of subdued inflation, the hope was that 2017 was the year that inflation and higher growth would kick back in. The economy just isn’t able to keep demonstrating that inflation is there yet.

Friday’s key economic reports included the first look at gross domestic product (GDP) for the second quarter. We also got to see the Employment Cost Index, and there was even a revised consumer sentiment reading from the University of Michigan. Other inflationary components from economic releases in the week of July 28 were pointing to mixed or lower inflationary pressure.

It was assumed that GDP was going to be much higher in the second quarter than in the first quarter, and the uptick went to 2.6% versus a 1.4% prior view of the first quarter. That 2.6% growth also met the Bloomberg consensus estimate. The GDP price index, which is the inflationary component, was up just 1.0%, versus a 1.2% consensus. The U.S. Department of Commerce also signaled that real consumer spending, the lion’s share of GDP, rose 2.8% as expected.

In GDP, business investment rose by 5.2% and helped offset lower residential investment (−6.8%). Inventories were also a slight negative in the second quarter. The report showed that net exports rose and were a slight positive in the tally, and government purchases also added a small amount to GDP.

One area that still remains muted is inflation in wages. The Employment Cost Index, which was also for the second quarter, rose just 0.5%. Bloomberg was projecting a 0.6% gain, and this was lower than the 0.8% reading from the first quarter of 2017. Still, the year-over-year rate was steady at 2.4%.

One additional consideration on the Employment Cost Index is that this is wages/salaries and benefit costs. The split in the second quarter was balanced between these two portions, with quarterly growth of 0.5% in wages/salary and 0.6% growth in benefits. The annual yearly comparison showed that wages/salary rose 2.3% and benefits rose by 2.5%.

Consumer sentiment did tick higher on the revision for July. The preliminary figure of 93.1 was lifted to 93.4. Unfortunately, that is lower than the 95.1 reading from June, and the expectations component fell by 3.4 points to 80.5. That unfortunately means that expectations are less rosy for the next six months or so than they are for the current time — which might signal pricing weakness and lower inflation ahead if they manifest the way the numbers read.

Also included in each sentiment report are consumer expectations for inflation. Consumers’ have a 2.6% expectation for inflation in their one-year outlook and in the five-year outlook. Whether consumers are a good judge remains up for debate, but this remains very subdued compared with historical data but is still at higher expectations than what we really have been seeing.

Earlier in the week, a report on durable goods showed that the core capital goods (which removes huge-ticket items from aircraft, defense and transportation) was down 0.1% in June’s monthly reading. That sounds quite weak, but it is still up 5.6% from a year ago.

Earlier in the week came the consumer confidence reading from the Conference Board, and it was 121.1 rather than the 117.0 expected by Bloomberg. This report also noted weaker than trend inflationary expectations from consumers.

When Markit released its PMI Flash reading for July, the composite figure rose 0.3 points to 54.2 while the services index was unchanged at 54.2. While the output and employment components were positive, the prices were mixed with higher wages being offset by lower fuel bills and soft selling prices.

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