The U.S. Bureau of Labor Statistics released its Consumer Price Index Summary today, June 11 to an increase in 0.1% inflation for the month of May. This is a drop from April, which was 0.2%, and a .2% increase from last May. Un-adjusted 12-month inflation comes in around 2.4%, which is still above the Federal Reserve’s current goal of 2%, but positive signs continue.
Inflation Breakdown
Food inflation was way down in April, especially due to the drop in egg prices. Since then, prices have gone up slightly at .3% (month-to-month), but they continue to be lower than the .4% increases seen in recent months. Egg prices were up in May after the massive drop from March and April, but continue to be much lower than the peaks of the first couple months of the year.
Egg prices saw a slight increase in May
Enerngy prices saw a massive drop, down 1.7% month-to-month, mainly due to gasoline prices. New car prices were down .3% and used cars were stable at -.5%.
Understanding Inflation
The Federal Reserve dropped interest rates last year due to cooling inflation, and now inflation continues to cool even more with this latest report. Since January, the economy has seen extremely postive inflation numbers, but the Federal Reserve is still reluctant to drop interest rates due to fears of inflation increases due to tariffs. U.S. President Trump announced a major deal with China today, and it looks like the trade talks are being worked out. Right now we have had four consecutive months of inflation reports, and the Federal Reserve may wait for a few months before pulling the trigger on more rate drops.