Inflation Indicator Climbs as Consumers Tighten Their Wallets
(Julie Jacobson/Associated Press)
Citing data from the Commerce Department on June 27, inflation indicators showed a notable rise in may, suggesting that prices are still quite high while consumer spending has taken a dip.
The report highlighted a year-over-year price increase of 2.3% for May compared to April’s figure of just 2.1%. When excluding the frequently enough fluctuating food and energy sectors, core prices saw an uptick of 2.7%, up from the previous month’s rate of 2.5%.Both metrics slightly exceed the Federal Reserve’s target benchmark of around 2%.
Inflation remained relatively mild in May with PCE inflation rising only by a slight margin to an annual rate of 2.3%, up from April’s figure of 2.2%. We’re all keeping our eyes peeled for more significant impacts from tariffs on pricing; however, so far it seems manageable.
The unexpected twist? Personal incomes and consumption have actually decreased… pic.twitter.com/0yQREzojzt — Heather Long (@byHeatherLong) June 27, 2025
This slowdown in spending coudl be attributed to fewer purchases related to vehicles and other manufactured goods after consumers ramped up their buying earlier this spring ahead of anticipated tariffs.
Tune into today’s daily briefing below or check out more details here:
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