The personal consumption expenditures price index rose 4.1% in May from a year earlier as gasoline prices climbed again, while consumer spending and income also increased.
By yourNEWS Media Newsroom
Higher gasoline prices pushed the Federal Reserve’s preferred inflation measure to its fastest annual increase in three years, according to Commerce Department data released Thursday.
The personal consumption expenditures price index rose 4.1% in May compared with a year earlier, marking the largest 12-month increase since April 2023. Prices increased 0.4% from April.
Core PCE prices, which exclude food and energy, climbed 3.4% from a year earlier and rose 0.3% on a monthly basis. Both the headline and core inflation readings matched expectations.
Energy costs were a major factor in the May increase. Gasoline prices rose 6.5% during the month, following gains of 5.5% in April and 20.9% in March.
Other categories showed more limited price movement. Durable goods prices were unchanged in May as lower prices for automobiles, household furniture and appliances helped hold the category steady. Clothing and footwear prices were also flat. Grocery prices increased 0.1%.
Services remained a source of inflation pressure, rising 0.5% for the month. Transportation services prices increased 0.8%, housing prices rose 0.3%, and health care services climbed 0.4%. Financial services and insurance prices rose 1.2%, largely reflecting stock market gains.
Consumers continued spending despite higher prices. Household expenditures increased 0.7% from April, or 0.3% after adjusting for inflation.
Personal income also rose 0.7% before inflation adjustment. After accounting for higher prices, income increased 0.3%.
A separate government report showed stronger first-quarter economic growth than previously estimated. Gross domestic product expanded at a 2.1% annualized rate in the first quarter, up from the earlier estimate of 1.6%. Economists had expected the figure to remain unchanged.
Original article
Comments