US PCE Inflation Expected to Accelerate in May

2026-06-25 08:11 By Joana Taborda 1 min. read

The US PCE price index is expected to rise 0.5% month-over-month in May 2026, accelerating from a 0.4% increase in April, as higher energy costs linked to the conflict with Iran continue to put upward pressure on prices.

The core PCE index, which excludes food and energy, is projected to increase 0.3%, up from 0.2% in the previous month.

On an annual basis, headline PCE inflation is forecast to accelerate for a third consecutive month to 4.1%, the highest reading since April 2023, compared with 3.8% in April.

Core PCE inflation is also expected to edge higher to 3.4% from 3.3%, marking its strongest pace since late 2023.

Overall, the report is likely to reinforce the view that inflationary pressures remain elevated in the US economy.

Reflecting these concerns, the Federal Reserve raised its inflation projections at its June 2026 meeting, forecasting PCE inflation at 3.6% and core PCE inflation at 3.3% for the year, both remaining well above the Fed's 2% target.



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US PCE Inflation Expected to Accelerate in May
The US PCE price index is expected to rise 0.5% month-over-month in May 2026, accelerating from a 0.4% increase in April, as higher energy costs linked to the conflict with Iran continue to put upward pressure on prices. The core PCE index, which excludes food and energy, is projected to increase 0.3%, up from 0.2% in the previous month. On an annual basis, headline PCE inflation is forecast to accelerate for a third consecutive month to 4.1%, the highest reading since April 2023, compared with 3.8% in April. Core PCE inflation is also expected to edge higher to 3.4% from 3.3%, marking its strongest pace since late 2023. Overall, the report is likely to reinforce the view that inflationary pressures remain elevated in the US economy. Reflecting these concerns, the Federal Reserve raised its inflation projections at its June 2026 meeting, forecasting PCE inflation at 3.6% and core PCE inflation at 3.3% for the year, both remaining well above the Fed's 2% target.
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US PCE Inflation Likely to Remain Elevated
The US PCE price index is expected to rise 0.5% month-over-month in April 2026, following a 0.7% increase in March, which marked the sharpest gain since June 2022 amid a surge in energy costs triggered by the war with Iran. The core PCE index, which excludes food and energy, is projected to increase 0.3%, matching the pace recorded in the previous month. On an annual basis, headline PCE inflation is expected to accelerate for a second straight month to 3.8% from 3.5% in March, reaching its highest level since May 2023 and aligning with headline CPI inflation. Core PCE inflation is also seen edging higher to 3.3% from 3.2%, marking its highest reading since late 2023. Overall, the report is likely to reinforce the view that inflationary pressures remain elevated and well above the Federal Reserve’s 2% target.
2026-05-28