Inflation in the United States Remains Stable in May

Twelve-month inflation in the United States exceeded expectations in May, reaching 3.3% compared to 3.4% in April, offering some relief after the surge earlier this year, according to the Consumer Price Index (CPI) published on Wednesday morning.

The Department of Labor’s data shows that month-over-month, prices in May remained stable compared to April, which saw a 0.3% increase from March.

The report is better than analysts anticipated, who had predicted 0.1% monthly inflation and a 3.4% year-over-year increase in prices, according to the consensus gathered by Market Watch.

Energy prices, particularly gasoline, fell, while housing and restaurant prices continued to rise.

Core inflation, which excludes the more volatile food and energy prices, also performed better than expected, standing at 0.2% month-over-month compared to 0.3% in April and 3.4% year-over-year in May, down from 3.7% in April.

These results are better than the market expectations of 0.3% and 3.5%, respectively.

Inflation shifted to a downward trend in April, for the first time since January.

These figures should provide some comfort to the Federal Reserve (Fed, central bank), which will conclude its June monetary policy meeting at noon this Wednesday, Washington DC time.

Nonetheless, the data still surpasses the Fed’s target of 2% annual inflation.

The market expects the Fed to keep interest rates unchanged, within a range of 5.25%-5.50%, the highest in over 20 years.