People shop at a store in Manhattan on April 30, 2025 in New York City.
Spencer Platt | Getty Images
Prices that consumers pay rose slightly in May, while the annual inflation rate edged further away from the Federal Reserve’s target, according to a Commerce Department report Friday.
The personal consumption expenditures price index, the Fed’s primary inflation reading, rose a seasonally adjusted 0.1% for the month, putting the annual inflation rate at 2.3%. Economists surveyed by Dow Jones had been looking for respective levels of 0.1% and 2.3%.
Excluding food and energy, core PCE posted respective readings of 0.2% and 2.7%, compared to estimates for 0.1% and 2.6%. Fed policymakers consider core to be a better measure of long-term trends because of historic volatility in the two categories.
Along with the inflation numbers, the report showed that consumer spending and income indicate further signs of weakening. Spending fell 0.1% for the month, compared to the estimate for an increase of 0.1%. Personal income declined 0.4%, against the forecast for a gain of 0.3%.
Markets showed little reaction to the data, with stock market futures indicating a positive open on Wall Street while Treasury yields also rose.
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