Core PCE inflation hits 3.4% because we refuse to stop spending
The Federal Reserve's favorite inflation metric just hit its highest level since late 2023, and honestly, we only have ourselves to blame. We are officially spending our way into poverty.
The newest inflation numbers are out, and they are incredibly sticky. The core PCE index—which is the Federal Reserve's absolute favorite way to measure how screwed our wallets are—jumped 3.4% in May. That is the highest rate we have seen in over half a year.
Why is this happening? Because we cannot stop buying things. Even though prices are higher than ever, Americans just dropped an extra $156 billion in a single month. Most of that went to stuff people literally cannot skip, like healthcare, rent, utilities, and gasoline.
And here is the kicker: because we keep swiping our cards anyway, companies have absolutely zero incentive to lower their prices. Why would they run a sale when we are willing to go into debt just to keep the lights on?
It turns out the ultimate cure for inflation is just being too broke to buy anything, but Americans haven't quite reached that rock bottom yet.
Source: CNBC
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