The US consumer price index (CPI) rose 0.1% in May, with the annual inflation rate at 2.4%, slightly below economists’ expectations. Core CPI, excluding food and energy, also saw a modest increase of 0.1% and 2.8%. Despite this, many key items, such as vehicle and apparel prices, experienced declines due to weakening energy prices.
The weak inflation print has tempered concerns about runaway inflation caused by President Trump’s tariffs, which were introduced in April with duties ranging from 10% to 25%. However, analysts argue that the impact of these tariffs may not be fully apparent for several months.
Weakness in energy prices helped offset some of the increases, and vehicle prices dropped 0.3%, while apparel prices declined by 0.4%. The decline in gasoline prices took the year-over-year decrease to 12%.
Food prices rose 0.3% and shelter saw a modest annual increase of 3.9%. Real average hourly earnings increased 0.3% for the month, up 1.4% from last year.
The US stock market futures turned positive after the report, while Treasury yields fell. However, some experts caution that it’s premature to assume inflation pressures won’t materialize, and further rate cuts may be necessary.
Trade tensions persist between the US and China, with both nations holding talks to resolve their trade disputes. The Trump administration continues to push for lower interest rates, citing easing inflation readings and signs of a slowdown in the labor market.
Source: https://www.cnbc.com/2025/06/11/cpi-inflation-may-2025.html