US Inflation Subsides as Energy Price Drops in May

The latest data from the Labor Department indicates that in May, the consumer price index (CPI) in the U.S. remained relatively  steady. This development suggests a slight easing of inflation’s persistent impact on the economy. 

According to the Bureau of Labor Statistics, the CPI, which serves as a general measure of inflation by tracking the costs of a variety of goods and services nationwide, did not rise over the month, showing the figure at 0.1%. However, it did show a 3.3% increase compared to the previous year.

Economists, surveyed by Dow Jones, had anticipated a 0.1% rise in the monthly CPI and an annual increase of 3.4%. In contrast, the April figures revealed a 0.3% monthly uptick and a 3.3% annual inflation rate. 

The core CPI, which excludes the volatile categories of food and energy prices, rose by 0.2% on a monthly basis and by 3.4% annually, slightly lower than the predicted 0.3% and 3.5% respectively.

While overall inflation rates were lower for both the general and core measurements, there was a 0.4% rise in shelter inflation on a monthly basis and a 5.4% surge from the previous year. Housing costs have been a major concern in the Federal Reserve’s efforts to manage inflation and carry significant weight in the CPI calculations.

Price surges were offset by a 2% decline in energy prices and a marginal 0.1% increase in food costs. Gas prices notably dropped by 3.6% within the energy category. Motor vehicle insurance, another problematic component of inflation, experienced a 0.1% monthly reduction but still saw a more than 20% increase compared to the previous year.