TD Securities forecasts May core PCE at 0.36% month-over-month, driven by persistent services inflation and higher energy prices.
US core Personal Consumption Expenditures (PCE) inflation is expected to accelerate to 0.36% month-over-month in May, up from prior prints, as services inflation remains firm despite weak goods prices. TD Securities attributes the rise to strong supercore components, with headline PCE projected at 0.49% due to higher energy costs, lifting the annual rate to 4.1%.
Consensus estimates had core PCE at 0.3% and headline at 0.5%, while April’s core reading was 0.25%. The forecast assumes supercore PCE at 0.55% month-over-month, supported by a strong Producer Price Index (PPI) for the month. Personal spending is seen growing 0.5% nominally but flat in real terms, while income growth trails at 0.4%.
The data release coincides with speeches from Fed officials Bowman, Williams, and Goolsbee, adding to market focus ahead of the 7-year Treasury auction.