US core PCE hits highest level since 2023 as inflation accelerates in May

(Sharecast News) - US inflation accelerated in May, with the Federal Reserve's preferred gauge posting its fastest core increase since 2023, according to the Bureau of Economic Analysis. The core personal consumption expenditures price index, which strips out volatile food and energy prices, rose 0.3% on the month and 3.4% year-on-year, both matching expectations. The annual rate was the highest since October 2023.

Headline PCE inflation increased 0.4% on the month and 4.1% on the year, the strongest annual reading since April 2023. The monthly figure came in slightly below forecasts.

The BEA's report showed that inflation pressures remain broad‑based, with energy‑driven price rises earlier in the year continuing to filter through the economy.

Despite the elevated readings, consumer spending was stronger than expected, with personal consumption expenditures rising 0.7%, outpacing inflation, while personal income also climbed 0.7%, well above the 0.4% forecast.







Reporting by Iain Gilbert at Sharecast.com