The consumer price index showed no increase in May as inflation slightly loosened its stubborn grip on the U.S. economy, the Labor Department reported Wednesday. This latest finding indicates a mild cooldown from the 3.4% annual inflation rate recorded in April, providing signs of potential relief for the economy.
Consumer prices rose 3.3% over the year ending in May, data showed. This figure represents a slight slowdown from the previous month and outperformed economists’ expectations. The data was released just hours before the Federal Reserve was set to announce a decision about whether to move its benchmark interest rate. It’s worth noting that inflation still stands more than a percentage point higher than the Federal Reserve’s target rate of 2%.
A notable decrease in core inflation was also observed, with the rate significantly easing to 3.4% over the year ending in May compared to the previous month. Core inflation, which excludes volatile food and energy prices, is a key measure that economists closely monitor to gauge overall price movement.
The Bureau of Labor Statistics’ data presented a glimmer of hope, indicating a mild slowdown in the relentless rise of consumer prices. The 3.3% increase over the year, although marginally lower than 3.4% in April, remains higher than the Federal Reserve’s ideal rate. Moreover, the subdued month-on-month inflation figures, with a 0% increase in overall inflation and a 0.2% uptick in core inflation, signal a potential moderation in price growth.
The developments in the latest inflation report may provide some relief amid concerns about the persistent and escalating price increases. With consumer prices rising at a somewhat slower pace, economists and policymakers are likely to closely monitor these trends for signs of continued stabilization in the economy.
