May CPI Report Softer Than Expected at a 2.4% Annual Rate

The Bureau of Labor Statistics reported that the Consumer Price Index increased 2.4% in May from year-ago levels, compared with 2.3% in April. Year-over-year core CPI (which excludes volatile food and energy costs) rose 2.8%, matching the April rate of 2.8%.

The CPI rose 0.1% month over month in May after rising 0.2% in April. Core CPI also rose 0.1%, matching the April increase.

Economists forecast the CPI to rise 0.2% on a monthly basis in May, taking the annual inflation rate to 2.5%, according to FactSet’s consensus estimates. Economists expected that core inflation rose 0.3% on a monthly basis and 2.9% on an annual basis.

May CPI Report Key Stats

• CPI rose 0.1% for the month after rising 0.2% in April.
• Core CPI also rose 0.1% after rising 0.2% in April.
• CPI increased 2.4% year over year after increasing 2.3% the prior month.
• Core CPI rose 2.8% from year-ago levels after remaining unchanged in April.

Food prices increased 0.3% in May after decreasing 0.1% in April. Grocery prices rose 0.3%, while restaurant prices increased 0.3%.

Energy prices were mixed after holding steady last month. Utility gas prices fell 1.0%, fuel oil prices increased 0.9%, gasoline prices fell 2.6%, and electricity prices increased 0.9%. Shelter prices rose 0.3% after rising 0.3% in April.