Inflation rises 3.3% in May, less than expected
The announcement comes after a Labor Department report showed that inflation slowed more than expected in May, even as prices remained high for millions of Americans.
Inflation slowed more than expected in May, a welcome sign for the Federal Reserve even as prices remained uncomfortably high for millions of Americans.
The Labor Department on Wednesday said that the consumer price index (CPI), a broad measure of how much everyday goods like gasoline, groceries and rent cost, was unchanged in May from the previous month. Prices climbed 3.3% from the same time last year. Both of those figures are lower than the 0.1% monthly increase and 3.4% headline gain forecast by LSEG economists.
Another data point that measures underlying inflationary pressures within the economy also moderated last month. So-called core prices, which exclude the more volatile measurements of gasoline and food in order to better assess price growth trends, increased 0.2% in May. From the same time last year, the gauge climbed 3.4% — the lowest reading since 2021.
Altogether, the report indicates that inflation is loosening its stranglehold on the U.S. economy, though prices remain well above the Fed's 2% target.
RENT PRICES ARE STAGNATING, SUGGESTING HIGH INFLATION MAY STICK AROUND
«After firing hot for the last few years, it appears the inflation engine is starting to cool off,» said Jason Pride, chief of investment strategy and research at Glenmede.
The softer-than-expected report comes just hours before the Fed is scheduled to announce its latest interest-rate decision. Investors anticipate that the Fed will hold rates at a 23-year high, although they will be parsing updated economic quarterly projections and Fed Chair Jerome Powell's post-meeting
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