Inflation declined to 3.8% in May, according to key gauge watched by Fed
by Zachary Halaschak, Economics Reporter |
June 30, 2023 08:32 AM
Inflation fell to a 3.8% annual rate in May, as measured by the gauge favored by the Federal Reserve.
The decline in the personal consumption expenditures price index reported Friday morning by the Bureau of Economic Analysis shows that inflationary pressures are abating in the face of the Fed’s campaign to slow economywide spending by hiking interest rates.
Nevertheless, inflation is still running hotter than the central bank’s target and dinging household purchasing power.
Core PCE inflation, a measure of inflation that strips out energy and food prices and is generally less volatile, is clocking in at a 4.6% year-over-year rate.
Other recent measures of inflation have shown that prices are falling back to Earth from the highs notched last year, which marked the country’s worst inflationary plague in decades.
The consumer price index showed a 4% annual rate of inflation in May, down from 4.9% the previous month. The annual CPI inflation rate has been trending downward since peaking last June and is now running at the lowest level since March 2021, right around when the country’s inflationary troubles started bubbling up.
Additionally, inflation fell to a 1.1% annual rate in May, as measured by the producer price index that gauges the wholesale prices of goods, which are eventually passed down to consumers.
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https://www.washingtonexaminer.com/policy/economy/inflation-declined-may-key-gauge
