The Fed’s preferred inflation measure rose at a 4.1% annual pace in May, the fastest since April 2023, as energy prices climbed. Consumer spending and incomes still increased after adjusting for inflation.
Posts tagged as “PCE”
U.S. stocks fell sharply and oil prices surged after President Trump pledged continued strikes on Iran without outlining a ceasefire plan or reopening the Strait of Hormuz. The Dow dropped over 600 points as energy prices and inflation concerns rose.
US economic strength was demonstrated in January, as the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 5.4% from a year earlier and 0.6% from December to January. Consumer spending also increased 1.8% from December, though goods prices declined 0.7%. The Core PCE index rose 0.2% from December to January, indicating that inflation remains entrenched in the US economy and the Fed is likely to keep raising interest rates.