The headline personal consumption expenditure (PCE) price index rose 1.8 percent year over year in May, an acceleration from a 1.6 percent pace in April and the largest rise since October 2012. On an annualized basis, headline PCE inflation was 2.8 percent, up from 2.4 percent the previous month and the strongest it has been since June 2013. Core PCE price inflation, which excludes food and energy, rose 1.5 percent year over year in May, its highest reading since February 2013, and it increased 2.0 percent on a monthly annualized basis. Both headline and core readings suggest that inflation is beginning to firm.
