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Key inflation gauge tracked by the Fed remains a high 6.3%

FILE— Gas is advertised for more than $6 per gallon at a gas station in Sacramento, Calif., Friday, May 27, 2022. Many California households could soon get help to pay for the state's record-high gas prices. Most California households would get up to $1,050 from the government to help them put the nation's most expensive gasoline in their cars, part of a relief package in the state's record-setting operating budget that lawmakers are scheduled to approve later this week. (AP Photo/Rich Pedroncelli, File)
FILE— Gas is advertised for more than $6 per gallon at a gas station in Sacramento, Calif., Friday, May 27, 2022. Many California households could soon get help to pay for the state's record-high gas prices. Most California households would get up to $1,050 from the government to help them put the nation's most expensive gasoline in their cars, part of a relief package in the state's record-setting operating budget that lawmakers are scheduled to approve later this week. (AP Photo/Rich Pedroncelli, File) FILE— Gas is advertised for more than $6 per gallon at a gas station in Sacramento, Calif., Friday, May 27, 2022. Many California households could soon get help to pay for the state's record-high gas prices. Most California households would get up to $1,050 from the government to help them put the nation's most expensive gasoline in their cars, part of a relief package in the state's record-setting operating budget that lawmakers are scheduled to approve later this week. (AP Photo/Rich Pedroncelli, File)

By PAUL WISEMAN / AP Economics Writer 4 min read

WASHINGTON (AP) – A measure of inflation that is closely tracked by the Federal Reserve jumped 6.3% in May from a year earlier, unchanged from its level in April.

Thursday’s report from the Commerce Department provided the latest evidence that painfully high inflation is pressuring American households and inflicting particular harm on low-income families and people of color.

The report also said that consumer spending rose at a sluggish 0.2% rate from April to May. Consumer spending is beginning to weaken in the face of high inflation. But it’s still helping fuel inflation itself, especially as demand grows for services ranging from airline tickets and hotel rooms to restaurant meals and new and used autos.

“It should really come as no surprise that U.S. consumers are paring their spending due to the high costs of, well, almost everything,” Jennifer Lee, senior economist at BMO Capital Markets, wrote in a research note. After adjusting for inflation, she noted, consumer spending actually fell 0.4% from April to May.

On a month-to-month basis, Thursday’s report showed, prices rose 0.6% from April to May, up from the 0.2% increase from March to April.