US inflation increases, as incomes drop and spending tumbles

The US data is disappointing on multiple fronts, suggesting the consumer is feeling stressed amidst weaker incomes and accelerating inflation, as highlighted by KPMG US Chief Economist Diane Swonk.

The United States' (US) personal consumption expenditure (PCE) price index rose 0.1 percent, well in line with expectations. That nudged the year-over-year measure of inflation to 2.3 percent after hitting a low of 2.2 percent in April. The core PCE index, which excludes the volatile energy and food components, rose 0.2 percent, more than markets expected. That translates to a 2.7 percent rise in the core PCE from a year ago. The modest acceleration in core inflation was driven by an accel...

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Authors: Diane Swonk

Published Date: 01 July 2025