The US inflation rate in May slowed to 4%, the lowest since March 2021, which increases the likelihood that the Federal Reserve may not raise interest rates at its upcoming policy meeting.
The consumer price index (CPI) showed a decrease from 4.9% in April. The energy index fell significantly, with gasoline down by 19.7% and fuel oil down by 37% over the past year.
The Federal Reserve aims to rein in inflation to its target of 2% without causing a recession. Core inflation, excluding energy and food, also slowed to a rate of 5.3%.
The report showed a slight increase in CPI in May, driven primarily by a 0.6% rise in shelter costs. Over the 12-month period, the cost of new vehicles increased by 4.7%, while used vehicles decreased by 4.2%.
Shelter costs and food prices accounted for the majority of the core inflation increase, with shelter up 8% and food up 6.7% over the year
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