Inflation in the United States fell in May for the second time in three months, according to government figures released on Wednesday, June 14.
The overall cost of living reduction was led by cheaper energy, although lower vehicle and clothing prices also contributed.
Consumer prices decreased 0.1% in May after climbing by 0.2% in April, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from energy to eggs.
Gasoline prices dropped 6.4% for the month, after increasing 1.2% in April. The decline marked their third in the last four months. Propped by six consecutive gains through January, prices at the pump are still 5.8% higher year-over-year. The broader index for energy, which combines items like gasoline, electricity and fuel oil, fell 2.7% in May after increasing 1.1% in April. Energy prices are 5.4% higher than a year ago.
After registering flat for sixth consecutive months, food prices picked up for a fifth month in a row, up 0.2% like in April. They are 0.9% higher than a year earlier.
Stripping the more volatile food and energy components, so-called core consumer prices advanced 0.1% in May to match the previous month.
Within the grouping, shelter costs rose 0.2% after moving up 0.3% previously. They picked up 3.3% over the past 12 months. Components of shelter include pricing items like rent, rental equivalence, lodging away from home, and housing at school.
Major items to decline in price included new and used vehicles, both by 0.2%, clothing by 0.8, and medical services by 0.1%.
U.S. inflation increased 1.9% through the 12 months ended May after moving up 2.2% previously. As recently as February, they surged 2.7% for their largest increase since March 2012. (See recent inflation rates.)
Core inflation rose 1.7% on an annual basis, the smallest gain since May 2015, after rising 1.9% in April.
"From out of nowhere we have now had three months of unusual weakness in underlying prices," RTTNews.com quoted Paul Ashworth, chief economist at Capital Economics. "It won’t stop the Fed from hiking interest rates… but it increases the downside risks to our forecast that there will be a further two rate hikes in the second half of this year."
The core annual reading is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate. Later Wednesday, the FOMC decided to raise interest rates for the second time this year to 1-1.25%.
The following table of key inflation figures is for the last seven months through May, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on June 14, 2017. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
November 2016 to May 2017 Consumer Prices – Gains & Losses in Percent
|Nov 2016||Dec 2016||Jan 2017||Feb 2017||Mar 2017||Apr 2017||May 2017||12 Month|
|Food at home||-0.1||-0.2||.0||0.3||0.5||0.2||0.1||-0.2|
|Food away from home||0.1||0.2||0.4||0.2||0.2||0.2||0.2||2.3|
|Gasoline (all types)||2.1||2.4||7.8||-3.0||-6.2||1.2||-6.4||5.8|
|Utility (piped) gas service||0.2||0.1||1.5||1.5||-0.8||2.2||1.9||12.8|
|All items less food, energy||0.2||0.2||0.3||0.2||-0.1||0.1||0.1||1.7|
|Commodities less food, energy||-0.2||.0||0.4||.0||-0.3||-0.2||-0.3||-0.8|
|Used cars and trucks||0.2||0.2||-0.4||-0.6||-0.9||-0.5||-0.2||-4.3|
|Services less energy||0.3||0.3||0.3||0.3||-0.1||0.1||0.2||2.6|
The BLS releases inflation data around the middle of every month based on consumer prices surveyed through to the previous month. The Consumer Price Index (CPI) for May and the latest annual period will become public on July 14, 2017.
CPI data is used in calculating inflation rates and in this site’s calculator for inflation. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.