Inflation Up Slightly in May as Grocery Prices Ticked Higher
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WASHINGTON — U.S. inflation picked up a bit last month as food costs rose, though overall inflation remained mostly tame.
Consumer prices increased 2.4% in May compared with a year ago, according to a Labor Department report released June 11. That is up from a 2.3% yearly increase in April.
Excluding the volatile food and energy categories, core prices rose 2.8% for the third straight month.
Economists pay close attention to core prices because they generally provide a better sense of where inflation is headed.
May's CPI data revealed an annual inflation rate of 2.4%, a slight increase from April's 2.3%. This figure was below economists' projections of a 0.2% monthly price gain.
A cooler-than-expected core CPI was driven by price declines in apparel and cars, categories where tariffs… — Schwab Network (@SchwabNetwork)
The figures suggest inflation remains stubbornly above the Federal Reserve’s 2% target, which makes it less likely that the central bank will cut its key short-term interest rate. Trump has repeatedly urged the central bank to reduce borrowing costs.
Last week, the Labor Department’s Bureau of Labor Statistics, which compiles the inflation data, said it is reducing the amount of data it collects for each inflation report. Economists have expressed concern about the cutback, and while it isn’t clear how sharp the reduction is, most analysts say it is likely to have a minor impact. Still, any reduction in data collection could make the figures more volatile.
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