Consumer Prices rose less than expected in May, slowing to +1.8% YoY (the same as headline PPI), both back below the Fed’s ‘mandated’ level of 2.0% for the first time since June 2017.
Both Goods and Services CPI slowed in May.
The index for used cars and trucks fell 1.4 percent in May, its fourth consecutive monthly decrease. The index for motor vehicle insurance declined 0.4 percent in May, the largest monthly decrease in that index since May 2007. The index for recreation decreased 0.3 percent for the month.
Lower gasoline prices played a role in keeping broader inflation tame. Energy prices fell 0.6% from the prior month and 0.5% from a year earlier as all major components in the category fell on an annual basis.
The index for owners’ equivalent rent rose 0.3 percent, while the index for rent increased 0.2 percent over the month. The index for lodging away from home fell 0.1 percent in May, breaking a string of 5 consecutive monthly increases.
Both rent and shelter inflation YoY slowed modestly in May.
The index for prescription drugs fell 0.2 percent, but the index for hospital services rose 0.5 percent and the index for physicians’ services advanced 0.1 percent.
The more watched Core CPI data also slowed to just 2.0% YoY (below forecasts) bolster investor expectations for Fed rate cuts this year (alongside slowing economic growth indications)
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Author: Tyler Durden