Inflation continues to tame itself, with the overall Consumer Price Index rising just 0.1% in May. In a welcome change, food and energy costs were the main mitigating factors, even though the overall food index rose for the first time in three months.
As a result, the Federal Reserve did not raise interest rates on June 14, the first time it paused since March 2022. Its 10 consecutive increases was the fastest pace of tightening since the early 1980s.
The CPI had risen 0.4% percent in April, the U.S. Bureau of Labor Statistics reported. And excluding food and energy, May’s increase for all other items also was 0.4%. Over the past 12 months, the all-items index increased 4.0% before seasonal adjustment.
The index for shelter was the largest contributor to the May all-items increase, followed by an increase in the index for used cars and trucks. The two-component food index increased 0.2 percent in May after being unchanged in the previous two months. Food at home prices rose 0.1% over the month while food away from home rose 0.5%.
For the 12 months ending with May, the all-items index increased 4.0% -- the smallest 12-month increase since the period ending March 2021. The food index has increased 6.7% over the past year.