The Consumer Price Index, which measures inflation, increased by 3.3% year over year in May, just below the 3.4% rate in April and the forecast. The CPI was unexpectedly unchanged from April to May. The year-over-year percent change in the Consumer Price Index in May fell just below the forecast, as did the percent change in core CPI.
According to a news release from the Bureau of Labor Statistics, the CPI increased by 3.3% from May 2023 to this past May, slightly lower than the forecasted 3.4%. The CPI remained unchanged from April to May, with an expected increase of 0.1% following a 0.3% rise from March to April. Core CPI, which excludes food and energy, rose by 3.4% year over year in May, also slightly lower than the forecasted 3.5%.
Inflation measures such as the CPI indicate that US inflation is still relatively high, although the rates are an improvement from 2022. The Federal Reserve’s interest rate decision is expected to be announced later on Wednesday, with no anticipated cuts to the target range for the federal funds rate at this time. However, there may be potential rate cuts later this year.
David Kelly, chief global strategist at J.P. Morgan Asset Management, has suggested that there might be enough economic softness and cooling for the Fed to cut rates this year. He believes there may be two rate cuts, one in September and another in December. This story is still developing, so it’s advised to check back for updates.