U.S. Personal Consumption Expenditures Index Rose 4.1% in May

The Bureau of Economic Analysis reported that the Personal Consumption Expenditures price index increased 4.1% over the 12 months ending in May, matching economist forecasts and marking the highest level since April 2023. The core PCE index, which excludes food and energy, rose 3.4% over the same period, compared with a 3.3% consensus estimate. On a monthly basis, core PCE increased 0.3%.

The report showed real personal spending rose 0.3% in May after adjusting for inflation, while real disposable personal income also increased 0.3%, the first such gain in four months. Service prices rose during the month, with notable increases in restaurant meals, hotel rooms, auto repairs, and healthcare.

A separate Commerce Department report revised first-quarter GDP growth upward to a 2.1% annual rate from the previous 1.6% estimate. Initial claims for unemployment benefits declined last week.

Oil prices have eased since their recent peak. Brent crude fell 0.5% to $73.40 a barrel on Thursday, down more than 35% from levels near $114 reached earlier. The Federal Reserve left its benchmark interest rate unchanged at its June 17 meeting.