#USCorePCEMay

📊 Key Data Highlights

Headline PCE rose +0.1% MoM, bringing the annual rate to 2.3%

Core PCE (ex-food & energy) increased +0.2% MoM and stands at 2.7% YoY, slightly above forecasts (2.6%)

Personal spending fell 0.1%, personal income dropped 0.4%, and the savings rate is at 4.5%

🔍 Context & Implications

Fed’s perspective: Core PCE is the Fed's preferred inflation gauge. A 2.7% YoY reading exceeds their 2% target, adding pressure on policymakers

Tariffs:

The central bank remains cautious, expecting tariffs to push inflation higher during the summer

Consumer behavior

The decrease in spending partly reflects consumers pulling forward purchases ahead of tariffs earlier this year