'Fed Preferred Inflation Gauge' US PCE Rose 6.3% Last Month...Same as Previous Month

[Asia Economy New York=Special Correspondent Joselgina] The inflation indicator preferred by the U.S. Federal Reserve (Fed) remained at a high level last month.

The U.S. Department of Commerce released the May U.S. Personal Consumption Expenditures (PCE) price index on the 30th (local time), showing a 6.3% increase compared to the same month last year and a 0.6% rise compared to the previous month. The year-over-year increase rate is the same as in April. However, the month-over-month increase rate rose significantly from 0.2% in April.

Excluding the volatile food and energy sectors, the core PCE for May rose 4.7% compared to the same month last year. Although this is a slowdown from 4.9% in the previous month, it remains at a high level.

The core PCE is the inflation indicator most preferred by the Fed when monitoring inflation trends. The Fed has signaled a 0.5 percentage point or 0.75 percentage point increase at the next FOMC meeting.

Fed Chair Jerome Powell stated at a forum the day before, "I do not agree that it (excessive tightening) is the biggest risk. The bigger mistake is failing to restore price stability." He reaffirmed that the Fed's top policy goal is price stability and indicated a willingness to accept some economic slowdown risks in the process.

Due to high inflation, American consumer spending in May rose 0.2% compared to the previous month, with the growth rate slowing down.