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May's Personal Consumption Expenditures data, released Thursday, showed headline inflation climbing to 4.1% year-over-year and core PCE reaching 3.4%—both at their highest annual readings in roughly three years—while consumer spending, disposable income, and personal income each rose 0.7%.
The numbers land directly at the feet of Federal Reserve Chairman Kevin Warsh, whose young chairmanship must now contend with a consumer that refuses to slow and inflation that has broadened beyond an energy shock.
What the Numbers Show The headline PCE index rose 0.4% in May on a monthly basis. The core measure, which strips out food and energy, climbed 3.4% from a year earlier.
On a three-month annualized basis, core PCE eased to 3.5% in May from 4.4% in February—a direction the Fed can point to, but a pace still well above its 2% target.
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