The PCE price index, as expected, rose 4.1% over the 12 months ending May, up from 3.8% in April, the highest since 2023.
The United States Bureau of Economic Analysis (BEA) released the May data for the Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve’s favored inflation metric and is closely observed by market participants due to its potential influence on policy outlook.
The US PCE price index increased by 0.4% month-over-month in May 2026, slightly below the expected 0.5% and consistent with April’s rise. Goods inflation decreased to 0.4% from 0.7%, while services inflation rose to 0.5% from 0.3%.
The core PCE index, which excludes food and energy, also grew by 0.3%, matching the previous month’s growth and market forecasts. Annually, headline PCE inflation rose for the third consecutive month to 4.1%, the highest since April 2023, while core PCE inflation increased to 3.4%, its peak since late 2023.
Monte Safieddine, Head of Market Research, Capital.com, says, “US data is dollar supportive and gold negative on balance — Core PCE came in at 0.3%, in line with expectations but still hotter than the previous 0.2%, while Final GDP surprised strongly at 2.1% versus 1.6% expected.
That combination tells the market inflation pressure is not cooling fast enough, while growth remains stronger than expected, reducing the urgency for Fed rate cuts. The dollar should stay bid, gold may struggle as real-yield expectations remain firm, and oil gets a mixed signal: stronger GDP supports demand, but a stronger dollar and tighter-rate narrative can cap the upside.”
In May, the PCE price index rose 0.4% from the previous month, with a 0.3% increase when excluding food and energy. Compared to May of the prior year, the index increased by 4.1%, and by 3.4% when food and energy are excluded.
Personal income increased $181.6 billion (0.7 percent at a monthly rate) in May, according to estimates released today by the U.S. Bureau of Economic Analysis (BEA). Disposable personal income (DPI)—personal income less personal current taxes—increased $164.9 billion (0.7 percent), and personal consumption expenditures (PCE) increased $156.1 billion (0.7 percent).
Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased by $159.9 billion in May. Personal saving was $704.2 billion in May, and the personal saving rate—personal savings as a percentage of DPI—was 3.0 percent.
US personal spending increased by 0.7% in May 2026, amounting to $156.1 billion, surpassing April’s revised 0.4% rise and market forecasts of 0.6%. Spending on goods was up by $61.8 billion, while spending on services saw an increase of $94.3 billion. Inflation-adjusted consumer spending rose by 0.3%, following no change in April.
US GDP
The US economy grew at an annualized rate of 2.1% in Q1 2026, revised up from 1.6%, mainly due to a downward revision in imports, which was partially countered by a downward revision in consumer spending.
Jobless Claims
The number of people claiming unemployment benefits in the US decreased by 12,000 to 215,000 in the third week of June, the lowest in four weeks and below expectations of 225,000. However, continuing claims rose by 21,000 to 1,821,000 in the first week of June, the highest in three months. Despite higher claim counts compared to early Q2, the figures are still strong historically. Additionally, initial claims from federal employees fell from 61 to 431.
US Markets
US equity futures rose on Thursday following Micron Technology’s earnings report, which bolstered support for artificial intelligence investments. Nasdaq 100 contracts gained over 2%, while S&P 500 contracts increased by 1%. Micron’s stock soared 17% in premarket trading after exceeding earnings and sales expectations, projecting approximately $50 billion in revenue for the quarter ending in August, surpassing the anticipated $43.2 billion.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Data and estimates cited are sourced from publicly available reports and economist surveys. Interest rate decisions and inflation trends are subject to change. Readers are advised to consult a qualified financial advisor before making any investment decisions.
