US PCE Inflation Expected to Accelerate in May as Energy Costs Remain Elevated

Persistent energy costs have kept inflationary pressures elevated in the United States following the recent conflict involving Iran. The Personal Consumption Expenditures (PCE) Price Index is forecast to rise 0.5% month over month in May, after increasing 0.4% in April.

The core PCE Price Index, which excludes food and energy, is projected to rise 0.3% in May, compared with 0.2% in the previous month.

On an annual basis, headline PCE inflation is forecast to accelerate to 4.1%, up from 3.8% in April, marking the highest reading since April 2023. Core PCE inflation is also expected to edge higher to 3.4%, from 3.3%, reaching its strongest annual pace since late 2023.

If confirmed, the data would indicate that inflation remains above the Federal Reserve’s long-term target despite signs of moderation in some components of consumer prices.

At its June 2026 policy meeting, the Federal Reserve raised its year-end inflation projections, forecasting PCE inflation of 3.6% and core PCE inflation of 3.3%, both remaining above the central bank’s 2% objective.

The Personal Consumption Expenditures (PCE) Price Index is the Federal Reserve’s primary measure of inflation for assessing price trends and is a key economic indicator in the evaluation of US monetary policy.

Source: U.S. Bureau of Economic Analysis (BEA); Federal Reserve.