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12/06/24
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May Inflation in U.S. Eases Ahead of Fed Decision
In May, U.S. consumer prices increased by less than anticipated on a yearly basis indicating a possible easing in price pressures that may affect how Federal Reserve policymakers see interest rates’ future path.
Last month, the consumer price index (CPI) from the Labor Department rose by 3.3%, dropping slightly from April 3.4%. Economists had forecast that the figure would be the same as April’s rate.
The reading slowed from 0.3% to 0.0% month-on-month, less than expected for a rise of 0.1%, after a drop in gasoline prices.
Excluding more volatile items such as fuel and food, the core number rose by 3.4% in the twelve months to May, lower than forecasts of 3.5% and April’s 3.6% level.
Underlying price growth also edged down to 0.2% on a monthly basis, less than expectations it would be in the same as April’s level of 0.3%, partly due to a drop in costs for apparel and new vehicles, as well as airline fares.
The data may affect how Fed officials expect rates to evolve.
The rate-setting FOMC is generally expected to keep the fed funds rate unchanged at a more than two-decade high range of between 5.25% and 5.5% after the meeting.
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