PCE inflation report May 2025:
According to the trade department report, the prices paid by consumers increased slightly in May, the annual inflation rate was far from the target of the Federal Reserve.
. Personal Consumption Expenditures Price IndexThe FED’s primary inflation reading rose by a seasonally adjusted 0.1% for the month and increased its annual inflation rate to 2.3%. Economists participating in the survey by Dow Jones were looking for 0.1% and 2.3% levels.
Excluding food and energy, Core PCE published 0.2% and 2.7% related readings compared to 0.1% and 2.6% estimates. FED policy makers think that the nucleus is a better measure of long -term trends due to historical volatility in two categories. The annual ratio was 0.1 percent in front of April reading.
The FED aims at 2%inflation, a level that has not been since the beginning of 2021.
In addition to the number of inflation, consumer expenditures and income showed more signs of slimming. Expenditure fell by 0.1% for the month compared to an increase of 0.1%. Personal income decreased by 0.4%by 0.3%.
Markets reacted very little to the data, the stock market futures showed that Wall Street was a positive deficit, while treasury returns increased.
“This morning news was consistent with other reports showing that the economy has gradually lost acceleration in the second quarter, in front of the tariff increases expected to wash in the summer and early autumn,” Wells Fargo Investment Institute market strategist Gary Schlossberg said. He said.
The report comes with the Fed considering the next move on interest rates. Schlossberg said that the report helped to “keep hopes alive” for the July rate deduction, but still seeing a conversation like “early”.
The markets are largely waiting for the Central Bank to remain in late July. However, inflation data, as long as President Donald Trump started to work in January, shows a number of officials to go through, as long as he shows pressure from the tariffs he was founded.
Trump insists that inflation is low and forces it to be fed to insist that the Central Bank can always change gear if the prices begin to rise again.
FED President Jerome Powell defended a more cautious approach despite the increasing aggressive pressure by the President. Trump has recently criticized Powell regularly, calling him “stupid” at the beginning of this week and shows that he will soon call his successor.
Inflation pressures were usually silenced in May.
Food prices increased by 0.2%, but this was balanced with a decrease of 1% in energy -related goods and service costs, including 2.2% slide in gasoline and other energy goods. Shelter prices increased by 0.3%.
Service prices are responsible for the majority of the increase in inflation, as they have increased by 3.4% compared to a year ago. The goods increased only 0.1%.
