Summary

• The price of gasoline was still a big driver of inflation in May, though in recent weeks, gasoline prices have dropped as crude oil prices have plunged.
• The “core services” PCE price index jumped by 0.46% in May from April (+5.6% annualized). The six-month core services PCE price index jumped by 4.2% annualized, the worst since June 2024.
• The core PCE price index – which excludes energy and food, and thereby excludes the spike in gasoline prices – rose by 0.32% in May from April (3.86% annualized).
• The all-items PCE price index – the other inflation index used by the Fed as its inflation yardstick – jumped by 0.45% in May from April (+5.5% annualized).

The 6-month “core services” PCE price index jumped 4.2% annualized, pushing the 6-month core PCE to 4.1%, the worst since June 2023.

The price of gasoline was still a big driver of