Core PCE Inflation Rises 2.6% in May, As Expected

The BEA's Personal Income and Outlays report revealed inflation rose at its slowest monthly in the past six months. Core PCE, the Fed's favored measure of inflation, was up 0.1% from April and was up 2.6% year-over-year. Both readings were consistent with their respective forecasts.

The latest headline PCE price index was flat month-over-month (MoM), as expected. On an annual basis, headline PCE was up 2.6% in May, as expected.

PCE Price Index

Personal consumption expenditures (PCE) measures and tracks changes for all domestic personal consumption. Core PCE measures the changes in personal consumption less food and energy, making it less volatile than the headline PCE. The PCE Price Index is calculated using PCE data and is a key way to measure changes in purchasing trends and inflation.