US Inflation Slows In May As Goods Prices Ease
Consumer Price Index Increased 3.3% Year-Over-Year
CPI Rose By 3.6% In April
WASHINGTON — The Labor Department reported Wednesday that the Consumer Price Index for All Urban Consumers (CPI-U) increased by 3.3% year-over-year in May, marking a slowdown from the 3.6% increase recorded in April. The CPI measures the change in the price of goods and services from the perspective of consumers and is a key indicator of inflation.
The deceleration in inflation was primarily driven by a slowdown in the price increases of goods, particularly energy and used cars. The energy index rose by 2.9% in May, compared to a 5.1% increase in April, while the used car and truck index rose by 5.3%, compared to a 10.1% increase in the previous month.
However, the food index continued to rise at a steady pace, increasing by 3.2% year-over-year, the same rate as in April. The housing index also saw a slight increase, rising by 2.5% year-over-year, compared to a 2.3% increase in April.
The Federal Reserve has been closely monitoring inflation as it considers when to begin raising interest rates. The central bank has a target inflation rate of 2%, and while the CPI has been above this target for several months, the Fed has indicated that it is willing to tolerate a temporary period of higher inflation as the economy recovers from the COVID-19 pandemic.
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