US Core PCE Price Index Shows Slowest Growth in Three Years, Up 0.1% in May

In May, the core personal consumption expenditures (PCE) price index rose by 0.1% on a seasonally adjusted basis, showing a 2.6% increase from the previous year, as per a report from the Commerce Department. 

This annual figure was down by 0.2 percentage point from April’s rate, marking the lowest since March 2021 when inflation surpassed the Federal Reserve’s 2% target.

The latest data met expectations set by Dow Jones, where headline inflation, including food and energy, remained constant both monthly and annually at 2.6%. Personal income saw a 0.5% increase, exceeding the estimated 0.4%, while consumer spending only grew by 0.2%, falling short of the 0.3% forecast.

Price stability in May was attributed to a 0.4% decrease in goods and a 2.1% drop in energy prices, compensating for a 0.2% growth in services and a 0.1% rise in food costs.