The PCE price index increased at a 4.1 percent annual rate in May, up from 3.8 percent in April and the highest reading since April 2023. Core PCE excluding food and energy rose 3.4 percent annually. Personal income and consumption expenditures each increased 0.7 percent while the saving rate reached 3 percent.
“Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge shows”
Read at CNBC →“Inflation rose to 4.1% in May in Fed’s preferred gauge”
Read at Washington Examiner →The 4.1 percent annual rate reflects supply pressures and corporate pricing power rather than excess demand, and framing it as a crisis risks justifying higher rates that raise costs for working families.
“Supply-side and distributional effects on lower-income households”
The rise from 3.8 percent in April confirms that fiscal expansion and regulatory policies produced stubborn demand-side inflation that has not cooled.
“Policy-induced demand pressures and need for sustained restrictive rates”
The increase erodes real wages and savings through ongoing monetary expansion that distorts price signals individuals use to allocate resources.
“Centralized monetary control as a non-legislative tax”
All three perspectives accept the 4.1 percent figure and forecast match without scrutinizing disputed monthly data, source contradictions, or the limited informational value of a consensus-aligned release.
“Overstatement of policy implications from routine, unrevised data”
Ratings by MBFC