The Federal Reserve's preferred <a href="https://www.foxbusiness.com/category/inflation" target="_blank" rel="noopener">inflation gauge</a> showed that prices ticked slightly higher in May as the central bank waits for signs of tariff-induced inflation reaching consumers this summer.

The Commerce Department on Friday reported that the <a href="https://www.foxbusiness.com/category/economic-indicators" target="_blank" rel="noopener">personal consumption expenditures (PCE)</a> index rose 0.1% on a monthly basis and 2.3% compared with a year ago. Those figures are largely in line with LSEG estimates, while the annual headline figure was up from 2.1% last month.

Core PCE, which excludes volatile food and energy prices, was up 0.2% from a month ago and 2.7% on an annual basis, slightly higher than LSEG estimates.

Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE was up from 2.1% in April, while core PCE also ticked higher from 2.5%.

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The Commerce Department released the PCE inflation report for May which found the Federal Reserve's favored inflation gauge ticked slightly higher to 2.3%.{ai:summary}The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) index, showed a slight increase in May, rising 0.1% monthly and 2.3% annually. Core PCE, excluding food and energy, increased by 0.2% month-over-month and 2.7% year-over-year.These figures align with estimates as the Fed aims to reduce inflation to its 2% target. The increase in both headline and core PCE suggests ongoing inflationary pressures that policymakers are closely monitoring. #economy

Fed's favored inflation gauge shows consumer prices ticked slightly higher in May

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