United States: U.S. inflation loses steam in May
June 16, 2016
Seasonally-adjusted consumer prices firmed up and rose 0.2% in May over the previous month. The reading followed the 0.4% increase tallied in April and fell short of the 0.3% increase the market had expected. May’s increase was mainly boosted by higher energy prices (+1.2% month-on-month), which included a jump in gasoline prices. Higher energy prices compensated for a decline in food prices (-0.2% mom). Inflation edged down from 1.1% in April to 1.0% in May.
Core consumer prices, which do not consider foodstuff and energy prices, rose 0.2% for the second consecutive month in May, matching market expectations. Core inflation inched up from 2.1% in April to 2.2% in May.
Although the Federal Reserve targets an alternative measure of inflation—called the personal consumption expenditures price index—U.S. monetary authorities also follow the core inflation measure closely in judging whether inflationary pressures are increasing in the economy.
Author: Ricardo Aceves, Senior Economist