The Personal Consumption Expenditure (PCE) price index in the United States remained unchanged in May 2024 compared to the previous month, marking the smallest change in six months. It follows a 0.3% increase in April and aligns with economists’ forecasts. Breaking down the index, prices for goods decreased by 0.4%, while prices for services saw a modest increase of 0.2%. 

The core PCE index, which excludes volatile food and energy prices, rose by 0.1% in May. This represents the smallest increase since November 2023 and is lower than the 0.3% rise observed in April. The result also matched forecasts.  

Looking at specific categories, food prices inched up by 0.1%, while energy prices experienced a significant decline of 2.1%. These figures contribute to the overall picture of easing inflationary pressures in the economy. 

On an annual basis, both the overall PCE rate and the core PCE inflation rate decreased to 2.6%. For the core PCE inflation, this marks the lowest level since March 2021. These annual figures provide a broader perspective on the inflation trend, suggesting a gradual moderation in price increases over the past year. 

These PCE figures are closely watched by economists and policymakers, particularly the Federal Reserve, as they provide crucial insights into inflation trends and consumer spending patterns. The data may influence future monetary policy decisions, including those related to interest rates. 

The dollar gained approximately 1.2% in June and 1.3% in the second quarter. The currency’s strength is attributed to the Federal Reserve’s slower pace in relaxing monetary policy compared to other major central banks. 

(Core PCE Price Index YoY%， U.S. Bureau of Economic Analysis) 

(Dollar Index Monthly Chart) 

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