Key Takeaways<\/p>\n
Consumer prices likely rose slowly in May, as measured by the Federal Reserve’s preferred inflation gauge, which will be released on Friday.\u00a0<\/p>\n
The Bureau of Economic Analysis report on Personal Consumption Expenditure (PCE)<\/a> inflation is expected to show that prices for consumer purchases rose 0.1% during May, the same as in April, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would make for a 2.3% increase over the past 12 months, up from a 2.1% annual increase in April.\n<\/p>\n Core PCE inflation,<\/a> which excludes volatile food and energy prices, is also predicted to have increased by 0.1%, with the year-over-year measure accelerating to 2.6% from 2.5% in April.\n<\/p>\n The core PCE inflation metric is especially significant because the Federal Reserve uses it as its benchmark for determining whether prices are rising at its target rate of 2% a year. While core PCE inflation has fallen from its recent peak of 5.7% in 2022, it’s still above the Fed’s target.<\/p>\n Tariff Impacts Loom <\/p>\n If Thursday’s report comes in as expected, it will correspond with May’s Consumer Price Index<\/a> report, which signaled that inflation is still cooling despite President Donald Trump’s wide-ranging tariffs<\/a>. Many forecasters expect to see import taxes push up inflation measures starting this summer.<\/p>\n