Personal consumption expenditures (PCE) price index data for May provides several key points:
Core PCE price index: The core PCE price index increased by 2.8% year-on-year in May, consistent with the growth rate in previous months. This suggests that core inflation remains stable without significant changes.
Total PCE price index: The total PCE price index increased by 3.8% year-on-year in May, slightly lower than the 4.3% in April. This shows that overall inflation has slowed but remains above the Fed's long-term target of 2%.
Compare with previous data:
Core PCE price index: The year-on-year growth of core PCE in the previous months has also remained at around 2.8%, which means that the core inflation rate has not changed significantly and remains stable. Aggregate PCE Price Index: Year-over-year growth in April was 4.3%, while falling to 3.8% in May, indicating that overall inflation is slowing.
The importance of these data is that they reflect changes in inflation trends. Although the inflation rate has declined, it is still at a high level, especially as the overall inflation rate is still above the Federal Reserve's 2% target. The Fed is likely to continue taking steps to adjust monetary policy in response to persistently high inflation