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Core PCE Inflation Rises to 3.4% in May, Highest Since October 2023, Fed Gauge Shows

6/25/2026

The core personal consumption expenditures price index — the Federal Reserve's preferred inflation gauge — rose 3.4% in May from a year earlier, the highest annual reading since October 2023.

The PCE price index had been forecast to show a 4.1% annual increase.

The Gauge the Fed Uses — and Why It Is Different The personal consumption expenditures price index is the inflation measure the Federal Reserve formally tracks when calibrating policy.

Understanding why it matters starts with what separates it from the more familiar consumer price index.