Fed's Preferred Inflation Gauge Falls to Three-Year Low

Facts

The US Commerce Department said on Friday that the core personal consumption expenditures (PCE) price index, a gauge closely tracked by the Federal Reserve, increased just a seasonally adjusted 0.1% from April to May.¹
This marks the lowest increase in the index since 2021, with the PCE now up 2.6% from a year ago. Last month, the reading was 2.7%.²
Prices for physical goods dropped 0.4% month-on-month, with gasoline prices falling by 3.4%, recreational goods and vehicles by 1.6%, and furniture prices by 1%. Meanwhile, prices for services went up 0.2%.³
The data further detailed that personal income rose by 0.5%, 10 basis points above forecasts, and that real consumption increased by 0.3% to offset a decrease of 0.1% the previous month.⁴
According to some Wall Street economists, these latest numbers may give the green light for the Federal Reserve to consider a rate cut at its September meeting.⁵
This comes as the consumer price index (CPI) has also been cooling, reaching an annual 3.3% in May — still up from the Fed's 2% inflation target but far down from the pandemic-peak of 9.1% in 2022.⁶

Republican narrative, as provided by Waysandmeans. Bidenomics has devastated the US economy, creating an inflation problem that the Biden administration has no clue how to solve. The latest data on the PCE index shows inflation over 3% — well above the official 2% target — for 39 straight months now. Ever since Biden took office, Americans have seen prices skyrocketing and real wages falling.
Democratic narrative, as provided by Fortune. It's certain that Biden inherited low rates of inflation when he entered office, but that was largely due to the pandemic effect on the economy. Then, once life returned to normal, prices soared amid severe shortages of goods and labor. Now, as the PCE shows, the Biden administration is successfully bringing inflation sustainably back to the 2% target.