June 2026 PCE Inflation Falls Slightly Amid Temporary Iran Truce
The U.S. Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) index, fell by 0.1% in June compared to May, according to data from the Bureau of Economic Analysis. The year-over-year rate dropped slightly to 3.7%, down from 4.1% in May, but remains above the Fed's 2% target. A temporary ceasefire between the U.S. and Iran helped lower energy prices during this period. Core PCE inflation, which excludes food and energy, rose by 0.1% for the month to a year-over-year increase of 3.3%. Consumer spending increased in nominal terms by 0.3%, with services driving most of the growth. Personal income also rose slightly due to higher compensation and government benefits. The Fed kept its benchmark interest rate unchanged at 3.5%-3.75% during a recent meeting, despite three officials dissenting in favor of an increase.
Topics: consumer spending economic data Federal Reserve PCE inflation