Weekly Economic Snapshot: Record Highs Amid Rising Inflation & Conflicting Sentiment

Last week's economic data presented a mixed picture, emerging against the backdrop of a record market rally. Inflation surprisingly heated up in May, reports on consumer attitudes showed conflicting signals, and the economy’s first quarter contraction was deeper than expected. Meanwhile, the S&P 500 climbed throughout the week, flirting with a record high before finally achieving that new milestone on Friday.

PCE Price Index

Inflation, as measured by the Federal Reserve's preferred metric, was higher than anticipated last month, inching further away from the Fed’s 2% target. The Core Personal Consumption Expenditures (PCE) Price Index, which excludes volatile food and energy costs, rose 2.7% year-over-year in May. The latest reading was higher than the expected 2.6% growth and marked a slight pick up from April’s 2.6% reading. On a monthly basis, core prices rose 0.2%. This was also higher than expected, surpassing the projecting 0.1% monthly growth. Meanwhile, the headline PCE Price Index saw a 2.3% annual increase. This was consistent with the forecast, but was up from April’s 2.2% growth. Monthly. The headline index also rose by 0.1%, as expected. Despite the latest report showing price increases accelerating, Fed Chair Jerome Powell testified to Congress earlier in the week that the central bank will remain in “wait-and-see” mode until they have more clarity on tariffs’ impact on inflation and the economy’s trajectory.

PCE Price Index

Consumer Attitudes

Conference Board Consumer Confidence Index