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Illustration: Aïda Amer/Axios

The price of goods and services grew 0.5% in May, slightly slower than the expected 0.6%, according to the core personal consumption expenditures (PCE) price index released Friday morning.

Why it matters: May's monthly reading shows a deceleration in the Fed's preferred measurement for inflation, from 0.7% in April. This, as the economy reopens, follows the directional trend of the latest consumer price index, which slowed from 0.8% to 0.6% from April to May.

  • Year-on-year, prices grew 3.4%, in line with expectations.

What they’re saying: In all of the current readings on inflation (CPI, PPI, and PCE), it's the month-over-month number that should be focused on versus the yearly comparison — which is largely irrelevant as inflation "fell through a trapdoor last year in March to June," Art Hogan, Chief Market Strategist at National Securities, tells Axios.

The big picture: The pace of inflation, which isn't always and necessarily bad, is top of mind for companies and consumers. Close to 200 companies in the S&P 500 talked about inflation during first-quarter earnings calls, and 77% of Americans are worried about it being too high

Data: BEA via FRED Chart: Axios Visuals

What to watch: Inflation is one of investors’ top fears for the rest of the year.

  • Fed chair Jerome Powell acknowledged last week that inflation has been higher than expected and revised the central bank's core PCE inflation forecast to 3.0% for the year, up from 2.2%. The overall inflation forecast was revised to rise to 3.4% for the year, up from 2.4%.

Go deeper

Powell gaining Senate moderates' support

Federal Reserve Chairman Jerome Powell. Photo: Al Drago/Bloomberg via Getty Images

Some Senate Democrats are urging President Biden to reappoint Federal Reserve Chairman Jerome Powell for a second term, suggesting that replacing him could erode the independence of the institution.

Why it matters: Public support from centrist Democrats has the potential to cinch reappointment for a figure credited with helping the country navigate the huge economic hit of the coronavirus pandemic. Powell's just completing what some termed a summer audition.

House passes $768 billion defense spending bill

Photo: Andrew Harrer/Bloomberg via Getty Images

The House approved a $768 billion National Defense Authorization Act (NDAA) for the 2022 fiscal year in a bipartisan 316-113 vote on Thursday.

Why it matters: The annual bill, which authorizes Pentagon spending levels and guides policy for the department, would require women to register for the military draft, among other provisions.

8 hours ago - Politics & Policy

Republicans’ secret lobbying

Illustration: Shoshana Gordon/Axios

The five Senate Republicans who helped negotiate and draft the $1.2 trillion bipartisan infrastructure bill have been privately courting their Republican colleagues to pass the measure in the House.

Why it matters: House GOP leaders are actively urging their members to oppose the bill. The senators are working to undercut that effort as Monday shapes up as a do-or-die moment for the bipartisan bill.