The consumer price index rose by 0.1% in May, bringing the annual rate of inflation to 2.4%. Excluding food and energy, the core CPI came in respectively at 0.1% and 2.8%.
Energy prices fell 2% last month, with gasoline experiencing a 2.6% decline that marked nearly a 12% year-over-year decrease. Fuel oil is down 9.6% for the year, but rose slightly by 0.9% on the month. Energy services rose 0.7% MoM and 6.2% YoY. Electricity ticked up 0.9% for the month; 3.6% for the year. Utilities have been experiencing a notable downtick after declining 1% in May and 15.7% for the year.
Food prices rose 0.3% on the monthly and 2.8% annually. Eggs, the media’s favorite item to watch, fell 2.7% for the month but still remain elevated by 41.5% compared to May 2024. Meats, poultry, fish, eggs saw a significant annual increase of 7%. Dairy items are up 1.6% in the past 12 months, and nonalcoholic beverages rose 3.2% in the same period. Food away from home rose 3.9% in the past year, with food at home rising 2% in the same time period. Full service meals and snacks are up 4.3% on the annual.
Shelter is the other major pain point for Americans, with costs rising 0.3% for the month and 4% in the past year. Rentals are increasing by 4% annually, with owners’ equivalent rent rising by 4.3%.
Inflation is still above the Fed’s 2% target. The Federal Open Market Committee will meet next week to discuss rates, a hotly debated topic. Vice President JD Vance lashed out at Fed Chair Jerome Powell for not lowering rates. “The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance wrote.
Interest rates are not some magic lever to fix job numbers or inflation. Vance, like many in Washington, is using Powell as a scapegoat for economic issues that stem from decades of fiscal mismanagement, overregulation, and government spending. Six months of a new administration cannot undo decades of failed policies. Moody’s downgraded the nation’s credit score for the first time. Powell must signal that US Treasuries remain a safe haven.
Cut prematurely, and we risk capital flight. Jerome Powell is doing his job in the face of real inflation, which isn’t malpractice. It’s what you do when you want the bond market to keep financing US debt.
Click this link for the original source of this article.
Author: Martin Armstrong
This content is courtesy of, and owned and copyrighted by, https://www.armstrongeconomics.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.
