US June Core PCE Rises 0.1% Month on Month, Year-on-Year Dips to 3.3%; Overall PCE Falls 0.1%
The US core personal consumption expenditures (PCE) price index rose 0.1% month on month in June, while the year-on-year rate declined to 3.3% from 3.4%. The overall PCE index fell 0.1% month on month, marking the first monthly deflation since April 2020. Service prices remained the main driver of monthly PCE increases. The energy component declined month on month, and post-release oil price gains were insufficient to reverse the trend.
In the three months prior to June, the overall PCE index had accelerated significantly. The overall PCE price index fell 0.1% month on month in June, the first monthly deflation since April 2020 when the Covid-19 pandemic began. Service prices remained the main factor driving the monthly increase in PCE. Although international oil prices rose after the June data release due to heightened tensions in Iran, the gains were insufficient to push the energy component of PCE higher. The energy component had already declined month on month in June.