The US PCE price index is expected to rise 0.5% month-over-month in May 2026, up from a 0.4% increase in April, as higher energy costs stemming from the conflict with Iran continue to exert upward pressure on prices. The core PCE index, which excludes food and energy, is projected to climb 0.3%, compared with a 0.2% gain in the previous month.
On an annual basis, headline PCE inflation is forecast to accelerate for a third straight month to 4.1% in May, the highest rate since April 2023 and above the 3.8% reading in April. Core PCE inflation is also expected to tick up to 3.4% from 3.3%, its fastest pace since late 2023. Taken together, the data are likely to underscore that inflationary pressures remain elevated in the US economy.
In response to these persistent price pressures, the Federal Reserve raised its inflation projections at its June 2026 meeting, forecasting PCE inflation at 3.6% and core PCE inflation at 3.3% for the year—both comfortably above the Fed’s 2% target.
