U.S. Inflation Eases to 3.3% in May; Core CPI Falls Ahead of Fed Rate Decision

Jun 12, 2024, 12:52 PM

U.S. inflation showed signs of easing in May, with the Consumer Price Index (CPI) rising 3.3% year-over-year, down from 3.4% in April. The core CPI, which excludes food and energy costs, also fell to 3.4% from 3.6% in the previous month. This marks the lowest core inflation rate since April 2021, with the core CPI up 3.42% over the last year. The month-over-month CPI remained unchanged at 0.0%, below the expected 0.1% increase. The decline in inflation was largely driven by a significant drop in energy prices and used cars, though shelter costs continued to rise, increasing by 5.4% year-over-year. The six-month annualized rate was 3.8%, while the three-month annualized rate was 3.3%. The easing inflation pressures come ahead of a pivotal Federal Reserve meeting, where officials are expected to discuss potential interest rate cuts. The data suggests that the Fed's policies may be working to curb inflation, increasing the likelihood of rate cuts later this year.