People pump gas at a gas station in Washington, D.C., on May 30. The core personal consumption expenditures rose at a 3.4% annual rate in May, setting the highest mark for inflation growth since October 2023. Photo by Bonnie Cash/UPI | License Photo
June 25 (UPI) -- The core personal consumption expenditures rose at a 3.4% annual rate in May, setting the highest mark for inflation growth since October 2023.
The Bureau of Economic Analysis reported Thursday that real personal consumption expenditures, a measure reflecting spending power and the volume of goods and services purchased, increased by $43.8 billion in May, a 0.3% hike. The personal consumption expenditures index, a measure of changes in prices for goods and services, increased by 0.4%.
The Federal Reserve's preferred diagnostic tool for measuring inflation, the PCE index, shows that inflation remains sticky. The two figures note that consumers continue to buy despite prices rising, lending to sticky inflation as businesses have little incentive to lower prices.
Raw personal consumption expenditures, the money that consumers spent, increased by $156.1 billion in May, up 0.7% from April. The growth in the dollar amount does not equate to a growth in goods and services sold because prices also increased.
