The Consumer Price Index (CPI), a closely watched measure of inflation that reflects the average change in prices paid by consumers for a wide range of goods and services, was released earlier today for the month of May. The data revealed a modest 0.1% increase on a month-over-month basis, while prices rose 2.4% over the past 12 months. As seen in previous months, shelter costs remained a key driver of inflation, rising 0.3% in May and contributing significantly to the overall monthly increase. Meanwhile, energy prices provided some relief, falling 1.0% as gasoline costs declined. Additional pockets of price softness were observed in categories such as airline fares, new and used vehicles, and apparel, all of which experienced declines in May.
CPI Home: U.S. Bureau of Labor Statistics (bls.gov)
The table below shows m/m percentage changes in CPI indexes which include Core CPI, Food and Energy (Core CPI excludes Food and Energy)
Source: Consumer Price Index Summary (bls.gov)
Inflation continues to trend steadily toward the Federal Open Market Committee’s (FOMC) long-term target of 2.0%, laying the groundwork for policymakers to proceed with a gradual normalization of interest rates. Looking ahead, the next FOMC meeting is scheduled for June 18th, but we see this meeting as more of a formality than a meeting where changes may occur.
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