PCE inflation tops 4% in May 2026, but spending stays strong
Key takeaways
- On a monthly basis, the PCE price index advanced 0.4%, the same pace as April.
- Spending held up despite the inflationary backdrop.
- The May inflation reading was in line with the forecast of economists polled by Reuters.
PCE inflation tops 4% in May 2026, but spending stays strong woman looks at eggs in a grocery store while pushing a cart and dressed in winter clothing · Quartz · Scott Olson / Getty Images Cris Tolomia Thu, June 25, 2026 at 8:29 PM GMT+7 2 min read The U.S. inflation gauge most closely watched by the Federal Reserve climbed 4.1% in the 12 months through May, the Bureau of Economic Analysis said Thursday — the first reading above 4% in three years and the highest since April 2023.
On a monthly basis, the PCE price index advanced 0.4%, the same pace as April. Stripping out food and energy, the core measure came in at 3.4% above year-ago levels and 0.3% higher than the prior month.
Spending held up despite the inflationary backdrop. The 0.7% monthly jump in personal consumption expenditures outpaced both the forecast and the inflation rate, with services accounting for $94.3 billion of the increase and goods contributing $61.8 billion. Personal income matched that 0.7% gain, and the saving rate stood at 3%.