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Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge shows

The Federal Reserve's preferred inflation gauge rose to a three-year high in May. Core PCE inflation reached 3.4% annually, while the headline PCE measure topped 4.0%. Consumer spending remains strong despite these price pressures.

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What changed

May data shows core inflation at its highest level since October 2023.

Live updates

  1. US Core Inflation Hits 3.4% in May, Highest Since October 2023

    The Federal Reserve's preferred inflation gauge rose to a three-year high in May. Core PCE inflation reached 3.4% annually, while the headline PCE measure topped 4.0%. Consumer spending remains strong despite these price pressures.

    What's confirmed:

    • The core personal consumption expenditures price index hit an annual rate of 3.4% in May.
    • The May core inflation rate is the highest since October 2023.
    • The headline PCE inflation measure exceeded 4.0% in May.
    • Core PCE inflation rose 0.3% for the month of May.
    • Consumer spending continued to grow in May.

    Still unconfirmed:

    • The Iran war pushed up energy prices and broadened price pressures.
    • Traders anticipate the central bank will hike interest rates.
    • The personal consumption expenditures price index was expected to show a 4.1% annual increase.
    confidence 95%