US May Core PCE Rises 3.4%, Matching Forecast; GDP, Jobless Claims Stronger Than Expected

The U.S. core personal consumption expenditures price index for May matched market expectations, while first-quarter economic growth and initial jobless claims came in stronger than forecast.

The core PCE price index, released on June 25, rose 3.4% from a year earlier. The reading matched the market forecast of 3.4% and was up 0.1 percentage point from the previous month’s 3.3%.

On a monthly basis, the index increased 0.3%, in line with the market estimate of 0.3%. That matched the previous month’s gain of 0.3%.

Core PCE excludes volatile food and energy prices. It is a key inflation gauge that the Federal Reserve monitors when deciding interest rates.

First-quarter U.S. GDP growth, released alongside the inflation data, was 2.1% on an annualized quarter-over-quarter basis. That was above the market forecast of 1.6% and sharply higher than the previous reading of 0.5%.

Labor market data also showed resilience. Initial jobless claims for last week totaled 215,000, below the market forecast of 225,000 and the previous reading of 227,000.

Initial jobless claims track the number of people who filed for unemployment insurance for the first time during the past week. A lower-than-expected figure is generally interpreted as a sign of a relatively solid labor market.