Annual Inflation Hits Three-Year High

The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure, rose 4.1% in May from the same month a year ago, the largest annual increase since April 2023. This was up from a 3.8% increase in April; On a monthly basis, inflation was 0.4%, matching April’s increase but down from 0.7% in March, according to the Commerce Department. The increase was driven largely by more expensive gas, as well as pricier semiconductors and other computer equipment in high demand for the artificial intelligence boom, according to 104.5 WOKV.

Core Inflation Also Rises, Signaling Broader Pressures

Core PCE prices. Which exclude volatile food and energy categories, rose 3.4% year-over-year in May, up from 3.3% in April. This was the largest increase since October 2023 and matched forecasters’ expectations, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. On a monthly basis. PCE prices rose 0.4%, less than the 0.5% that forecasters had expected. The rise in core inflation suggests that inflation pressures extend beyond gasoline and food, challenging the Federal Reserve’s mandate to maintain price stability, according to AOL.com.

Apple Raises Prices Amid Component Shortages

In response to rising costs, Apple raised prices for several of its products, including Macs and iPads, citing a memory chip shortage brought on by the artificial intelligence boom. The company described the demand spike as an “unmatched challenge” for the consumer electronics industry. The entry-level MacBook Neo now costs $699, up from $599. The 512 gigabyte MacBook Air now costs $1,299, up from $1,099, and the one terabyte MacBook Pro is now $1,999, up from $1,699. “We have never seen a component price increase this much, this quickly,” the company said in a written statement.