After rising 4.9% year-over-year in April, US consumer prices continued their descent last month, increasing 0.1% to an annualized 4%— slightly below forecasts calling for a print of 4.1%. Core CPI, which does not account for food and energy, was up 5.3% over the past 12 months, slightly below the prior month’s 5.5% and in line with expectations.
Looking under the hood, the biggest contributors to last month’s inflation were the shelter and used cars and trucks indices, which jumped 0.6% and 4.4% month-over-month, respectively. Food inflation, meanwhile, continued to ascend upwards, rising 0.2% in May to an annualized 6.7% after briefly dipping the month before. Three of BLS’ six main food categories noted price gains, primarily the index for fruit and vegetables, which was up 1.3% from April.
Energy prices were also down 3.6% in May, following a 0.6% month-over-month increase in April. Nearly all energy components noted price declines, with the gasoline index dropping 19.7% over the past 12 months; on the contrary, though, the index for electricity was up 5.9% from one year ago.
The latest inflation print will be a critical indicator ahead of the Fed’s two-day policy meeting that wraps up on Wednesday, where markets are broadly expecting Fed Chair Jerome Powell to pause the rate hiking cycle.
Information for this briefing was found via the BLS and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
