Core inflation rate hit 3.4% in May, highest since October 2023, Fed's preferred gauge shows [View all]
Source: CNBC
Published Thu, Jun 25 2026 8:32 AM EDT Updated 20 Min Ago
The Federal Reserve’s primary price gauge rose at its highest level since 2023, reinforcing the central bank’s recent tough talk on inflation.
Excluding food and energy, the personal consumption expenditures price index showed a 3.4% annual rate after rising 0.3% for the month, both in line with Dow Jones consensus. The core reading was the highest since October 2023.
For the all-items reading, the PCE index showed inflation running at a seasonally adjusted 4.1% annual rate, the highest since April 2023, according to a Commerce Department report Thursday. On a monthly basis, PCE accelerated 0.4%. The annual level was in line with the Dow Jones consensus estimate while the monthly reading was 0.1 percentage point below.
While Fed officials look at both headline and core rates, they generally consider the latter a better measure of long-run trends, particularly in light of this year’s inflation surge that was driven largely by an acceleration in energy prices tied to the Iran war that have slowly been seeping into other parts of the economy.
Read more: https://www.cnbc.com/2026/06/25/pce-inflation-report-may-2026-.html
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People's incomes rose 0.7% in May; spending grew 0.7%. Both figures are in current dollars.
https://bea.gov/data/income-saving/personal-income
8:32 AM · Jun 25, 2026
Article updated.
Previous articles -
The Federal Reserve's primary price gauge rose at its highest core level since 2023, reinforcing the central bank's recent tough talk on inflation.
Excluding food and energy, the personal consumption expenditures price index showed a 3.4% annual rate after rising 0.3% for the month, both in line with Dow Jones consensus. The core reading was the highest since October 2023.
For the all-items reading, the PCE index showed inflation running at a seasonally adjusted 4.1% annual rate, the highest since April 2023, according to a Commerce Department report Thursday. On a monthly basis, PCE accelerated 0.4%. The annual level was in line with the Dow Jones consensus estimate while the monthly reading was 0.1 percentage point below.
While Fed officials look at both headline and core rates, they generally consider the latter a better measure of long-run trends, particularly in light of this year's inflation surge that was driven largely by an acceleration in energy prices tied to the Iran war that have slowly been seeping into other parts of the economy.
The Federal Reserve's primary price gauge rose at its highest core level since 2023, reinforcing the central bank's recent tough talk on inflation.
The personal consumption expenditures price index showed inflation running at a seasonally adjusted 4.1% annual rate, the highest since April 2023, according to a Commerce Department report Thursday. On a monthly basis, PCE accelerated 0.4%. The annual level was in line with the Dow Jones consensus estimate while the monthly reading was 0.1 percentage point below.
Stripping out food and energy, core PCE showed a 3.4% annual rate after rising 0.3% for the month, both in line with consensus. The core reading was the highest since October 2023.
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Original article -
The personal consumption expenditures price index was expected to show a 4.1% annual increase, according to the Dow Jones consensus.
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