May Inflation Report Beats Expectations

Rising Inflation? Not Yet

While the California Insurrection is dominating the headlines, the May Consumer Price Index Summary report from the Bureau of Labor Statistics reminds us that life moves forward in spite of rebellion and civil strife.

Somewhat pleasantly, the report was slightly better than anticipated, with month on month inflation actually easing.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent on a seasonally adjusted basis in May, after rising 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.4 percent before seasonal adjustment.

Core consumer price inflation remained steady year on year.

Month on month, core inflation fell more than 0.1pp, falling to 0.13%. Headline inflation fell even more, down to 0.08%

As I indicated on Monday, inflation has been projected to rise.

Inflation Returns For May?

While year on year inflation ticked higher as expected, the lack of movement in core inflation year on year, and the decline month on month means the question of rising inflation is still being answered “not yet".

Still, there are recent signs of growing inflationary pressures in the economy. Market energy prices have recently begun rising (although the bulk of that increase lies in June rather than May).

At the same time, retail gasoline prices are still broadly declining, according to Gas Buddy.

Natural gas prices are currently moving largely sideways.

Still, the possibility of increasing energy price inflation means a likelihood that headline consumer price inflation could trend higher over the next few months.

Are you seeing inflation easing off where you are? Leave a comment below or drop one in chat and let me know!

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