Fed's preferred inflation gauge hits 3-year high
Summary
The Personal Consumption Expenditures (PCE) index, which the Federal Reserve uses to measure inflation, increased at a 4.1% yearly rate in May. This is the highest inflation rate since April 2023 and shows the difficulty the Federal Reserve faces in controlling rising prices.Key Facts
- The PCE index rose 4.1% over the year ending in May.
- This matches predictions made by economists.
- The previous month, April, saw a 3.8% annual increase.
- The 4.1% rate is the highest inflation since April 2023.
- The PCE index is the Federal Reserve’s favored measure of inflation.
- Higher inflation means prices are rising faster, which is a challenge for the Fed.
- The report highlights ongoing inflation concerns in the U.S. economy.
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