May PCE shows slowing inflation

June 28 (UPI) -- The personal consumption expenditures price index, the key statistic monitored by the Federal Reserve, rose 0.1% in May and 2.6% over the past year in the latest sign of slowing inflation in the economy, the Commerce Department said Friday.

The monthly and year-to-year index rates were the lowest since March 2021. The numbers were in line with estimates from Wall Street economists.

In the meantime, personal income jumped 0.5% in May, or $114.1 billion. Disposable personal income (DPI), or personal income less personal current taxes, increased 0.5%.

"The $47.8 billion increase in current-dollar PCE in May reflected an increase of $34.2 billion in spending for services and a $13.6 billion increase in spending for goods," the Commerce Department said.

"Within services, the largest contributors to the increase were healthcare (led by hospitals), housing and utilities (led by housing), and transportation services (led by air transportation)."

The Commerce Department said among goods, increases came from other nondurable goods like prescription drugs, which were partly offset by a decrease in gasoline prices and other energy goods.

Inflation in April was also in line with economist expectations, with the personal consumption expenditures price index rising 0.3% that month and 2.7% over 12 months.