US core inflation rose to 3.4% in May, marking its highest level since October 2023, according to the Federal Reserve’s preferred inflation gauge, reinforcing concerns over persistent price pressures.
The latest reading from the Personal Consumption Expenditures (PCE) price index showed that inflation continued to accelerate, supporting the Federal Reserve’s recent cautious stance on monetary policy and its focus on controlling price growth.
According to a report released by the United States Department of Commerce, the headline PCE index increased to 4.1% annually after seasonal adjustment, reaching its highest level since April 2023.
On a monthly basis, the PCE index increased by 0.4%, reflecting continued momentum in consumer prices. The annual figure matched expectations tracked by Dow Jones & Company, while the monthly increase came in slightly below forecasts by 0.1 percentage point.
Excluding volatile food and energy prices, the core PCE inflation rate also climbed to 3.4% year over year after rising 0.3% during the month, with both figures in line with market expectations.
The latest inflation data represents the highest core inflation reading since October 2023 and may add pressure on the Federal Reserve System as policymakers assess the timing of future interest rate decisions.
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