Core pce inflation in May 2026 came in at 3.41% year over year

 What in the Sam Hell is golden about this age?

Absolutely nothing. 

There's nothing Greenspan about it either. 

Alan Greenspan's core pce inflation averaged 2.46% year over year 1987-2006.

 

 

 

 

Core pce inflation remained high but falling during Greenspan's first seven years, but stayed below the trend he helped to create for the remaining thirteen

PCEPILFE fell to 2.23% yoy in 1994 and as low as 1.27% by 1998 even as the Fed Funds Effective Rate (DFF) averaged 5.49% for four years 1995-1998.

Greenspan's observed "irrational exuberance" in stocks certainly wasn't caused by low interest rate policy. By today's standards his policy was hawkish even as the market formed a bubble.

His career core pce inflation performance averaged 2.46% yoy.  

It is difficult to imagine today's world being at all patient enough to tolerate Alan Greenspan, especially the Alan Greenspan of 1987-1990 when DFF averaged 7.89%.

He would be run out of town like Ben Bernanke and Jerome Powell, neither of whom arguably were in office long enough to really judge fairly by comparison with Alan Greenspan and both of whom were shabbily treated by Obama and Trump.

 

 

The Maestro is dead, long live The Maestro

 

 Greenspan had the main ideas right:

Low inflation over full employment, because inflation is the worst tax on the people;

And broad property ownership as the foundation supporting the American economy and securing the consent of the governed.

During his nearly 20-year tenure, the Federal Funds Effective Rate averaged 4.87%. 

This is a really good look at Greenspan's career from Marty Steinberg at CNBC. It is one of the best reads I've had at CNBC in a long time. 

 Alan Greenspan, former chairman of the Fed, dies at age 100

... Throughout, he focused on fighting inflation over promoting full employment. His supporters say he presided over the longest economic expansion in U.S. history, but critics said Greenspan’s low interest rate policies set the stage for the housing bubble that burst into the Great Recession a year after his successor, Ben Bernanke, took the Fed helm.

... in his best-selling memoir “The Age of Turbulence,” he defended the low-rate policy, which encouraged people to buy homes: “I believed then, as now, that the benefits of broadened homeownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.” ... 

Core wholesale prices, not seasonally adjusted, rose 4.89% yoy in May 2026, a sideways move from 4.85% the previous month which however was initially reported at 5.2%

 

 Wholesale prices rose 1.1% in May, more than expected, on surge in energy

The producer price index increased a seasonally adjusted 1.1% in May, putting the 12-month wholesale inflation rate at 6.5%, the highest since November 2022.

Excluding food and energy, the so-called core PPI accelerated 0.4%, compared with the consensus view of 0.5%, indicating that rising fuel prices are causing much of the inflationary burden.  

Wholesale prices are frequently revised significantly from month to month but that is seldom followed-up.

According to this report, core wholesale prices increased last month at a somewhat less fearsome rate, and this month is about the same as that revision.

Should I get excited when it's not 5.2% when it's still pretty awful?

I still expect increases in energy costs to act as a screen for producers to increase prices more than warranted in order to realize higher profits. 

My latest lube, oil, and filter cost me $83, $30 of which was labor. The specific oil used retails for $7.99/quart. My discount was $0.24/quart lol.

But in 2021 the very same oil retailed for $3.99/quart. 

 

core nsa

total index nsa

 

The lover of the poorly educated says he loves the inflation

 Trump says ‘I love the inflation’ after consumer price index hits 3-year high

Two years ago Trump was promising to cut our energy bills in half, but now we get a 23.5% year over year increase in energy inflation in May 2026 on top of double digit increases in March and April

 Because he doesn't have a clue what he's talking about.

Why do they always seem to do the opposite of what they promise? 

 

 

Consumer price index inflation in May 2026: +4.2% year over year overall, +2.9% or +2.8% year over year for core, depending on whether you go not seasonally adjusted or seasonally adjusted

Commenters may like to draw a sharp distinction between overall and core and point to core as evidence that this is not so bad, but the thing is, both overall and core measures have been steadily rising since February.

Overall cpi inflation which includes food and energy bleeds into core eventually, because energy inflation drives up the cost of everything.

This is ugly and getting uglier. 

The president has scored an own goal opening the Iran war without a plan to keep the oil flowing.

  

core not seasonally adjusted

core seasonally adjusted

Who's gonna tell him?

 Bessent: Inflation jump will be 'short-term blip'...

Core inflation has been rattling around 3% or higher for nearly five consecutive years as our betters fail to get inflation down to their 2% goal.

I say their goal because 0% is the goal in the law. 

Goals are real nice, aren't they?

They, too, are meaningless. They are tricks to persuade you that our elected officials are serious people who agree with you while they have no intention of doing what they say they will do.

"Well I'm really sorry, Mr. Smith. We tried really hard to get inflation down but we had all these unexpected events ruin our best efforts." 

In 1Q2026 core inflation rose, to 3.11%, and under current circumstances no one thinks 2Q is going to be lower, which will make it five full years of this and headed the wrong way again.

One good blip deserves another, I guess. 

The Treasury Secretary is not serious about inflation, and just about everyone points to Scott Bessent as the serious person in this administration.

We are so screwed. 

 

Tim Carney doesn't mention why the bad polling results for Republicans and Trump on the economy started already in May 2025

The word "tariff" does not appear in this column lol.

The Impending Republican Collapse

Tim Carney, Washington Examiner

  

... But the bad polling trends for Republicans and Trump generally started late last year, before the attack on Iran. The right-track-wrong track numbers started souring last May.

It’s reasonable then to suspect that Trump’s other problems — including stubborn inflation (aside from gas prices) and his family’s sketchy business dealings — are harming the GOP. This pre-Iran trend also suggests that the numbers won’t simply reverse if the Strait of Hormuz reopens and gas prices fall.

The Republican Party’s problem is deeper than gas prices, and so things won’t get better before November. The only question is whether things get worse.

Gold and silver are still up 5+% year to date

 SPX +10.52% ytd

WTI +53.11% ytd

 

Meanwhile in April: 

Hamburger +18.9% yoy

Coffee +29.0% yoy

Unleaded regular gasoline +28.0% yoy

Electricity +7.2% yoy

Natural gas +3.1% yoy

[Trump 9/21/2024: "We will cut your energy prices in half. Mark it down . . . within 12 months . . ."] 

Milk +1.5% yoy

Whole Chicken -1.6% yoy 

Eggs -56.1% yoy

Tomatoes +50.0% yoy

 

And: 

30-year mortgage average monthly, above 6% since August 2022

Full time jobs above 50% of population just 6 of the last 25 quarters, all under Joe Biden

 

When 86 is the good news

The sum of the average prices of five ingredients for your April 2018 BLT (bacon, lettuce, tomato, lightly toasted white bread in butter) is 86-cents less in April 2026 than it otherwise would have been if it had increased as much as overall inflation has increased, up 27% instead of 33%.

Don't spend it all in one place.

Trump inflation is Bush-league: PCE inflation goes boing, core PCE inflation 3.3% year over year takes us back to early 1992

And you remember what happened to Bush 41 in 1992.

 

boing

Trump's core pce inflation is Bush-league (41!)

Silver is still up 6.14% year to date, gold 5.09% even as energy prices march higher

 But SPX is up 8.02% ytd.

WTI is up 84.01% ytd.

VGENX is up 20.88% ytd.

 

Investment grade corporate securities:  

VWESX is down 1.54% ytd.

VFICX is down 0.65% ytd.

VFSTX is up 0.27% ytd.

 

US Treasury securities:

VUSUX is down 2.52% ytd. 

VFIUX is down 1.05% ytd.

VFIRX is up 0.16% ytd. 

 

Inflation:

CPI (CPIAUCSL) is up 3.77% year over year in April.

PCE (PCEPI) is up 3.49% yoy in March. 

 

Nominal Broad Dollar Index:

April: 119.03

1Q2026: 119.01

2025: 122.75

5Y: 119.94 

 

GDP, Compound Annual Growth Rate

5Y: 7.031% nominal, 2.775% real 

 

 

Kevin Warsh wasn't sworn in as Fed chair on Friday and Powell is still in charge because Warsh has so many assets to unload to meet ethics requirements he couldn't get 'em all done on time lol

 So the bond vigilantes threw a party and sold off, spiking yields across the board 1.44% on the day, throwing down the gauntlet at Warsh, daring him to cut in the face of all the chaos Trump is causing.

The 20-year soared to 5.14%.

Yields are up 2.8% in the aggregate since the beginning of the month.

6% inflation is knocking on the door.

Inflation rate projected to hit 6% in the second quarter, top economic forecasters say

 

 

 

Real retail sales just comin' up for air

 

CNBC doesn't really want to talk about how bad April's increase in wholesale prices was, doesn't mention the year over year increase to core, stripping out food and energy, at 5.2%

 Wholesale inflation jumps 6% in April on annual basis, biggest increase since 2022

... The producer price index rose a seasonally adjusted 1.4% for the month, much higher than the 0.5% Dow Jones consensus forecast and the upwardly revised 0.7% March increase, the Bureau of Labor Statistics reported Wednesday. This was the largest monthly gain since March 2022.

On an annual basis, the index was up 6%, the biggest increase since December 2022.

Excluding food and energy, the core PPI accelerated 1%, compared with the 0.4% estimate. ...

While much of the inflation move has been attributed to the war and President Donald Trump’s tariffs that were introduced a year ago, the PPI data shows the price pressures were broad-based. ...

I'll say.

Looks to me like producers giving us all the middle finger. 

I expect new record high corporate profits. 

 

 

Adjusted for consumer price index inflation since October 2019, a traditional American breakfast should cost you 29.4% more in April 2026, instead it's 54.9% more!

29.4% more is bad enough, right? 

The ingredients for a traditional American breakfast in April 2026, adjusted for consumer price index inflation since October 2019, should cost $29.91.

Instead they cost $35.79, $23.11 plus 54.9%.

Menu: Bacon and eggs, whole wheat toast with butter, coffee with milk and sugar, and a glass of orange juice.

The Biden high for all this was $33.20 in January 2023.

The all-time high to date was in March 2025 under Trump at $37.67.

The April 2026 Trump price is still 7.8% higher than the Biden high three-plus years ago.

  

Power prices did not climb 61%: The consumer price index for electricity was up 6.1% year over year, and the average price of electricity was up 7.2% year over year

The Bloomberg headline linked to by Drudge meant that the rate of inflation for the consumer price electricity index at 6.1% year over year was 61% higher than the overall consumer price index rate of inflation of 3.8% year over year.

 

A different measure, the average price of electricity, climbed 7.2% year over year to a new high of 19.4 cents per kilowatt-hour.

 

It will be of little comfort to many to note that it could be worse.

 

While the price of a barrel of oil has far outrun inflation over the long haul, electricity has not. At 4.6 cents in November 1978, its inflation adjusted price today would be 22.73 cents.

 

  

 

Yes 6.1% is a rate 60.5% higher than 3.8%

 

 

 

 

 

 

 

 

 

Many things have an explanation, if you think about them long enough.

Overall consumer price index inflation came in at 3.8% yoy in April 2026, core cpi at 2.8% yoy

The overall rate of inflation in April 2026 at 3.8% yoy is 100% higher than the average rate of 1.9% yoy under Trump I.

The core rate in April 2026 at 2.75% yoy is 40% higher than the average rate of 1.965% yoy under Trump I.

Food inflation was 3.2% yoy in April 2026, but energy inflation was 17.53% yoy in April on top of 12.58% yoy in March.

The energy inflation is a self-inflicted wound by Donald Trump. It's almost like he thrills at the prospect of defeat.