The inflation rate in the United States fell to four percent in May and is the lowest in more than two years. This was announced today by the US Department of Labor. The drop is a little more pronounced than analysts expected. In April, inflation was at 4.9 percent. On a month-over-month basis, prices rose 0.1 percent, also better than expected.
Analysts’ estimates
Analysts in a Reuters poll had expected the inflation rate for May to fall to 4.1 percent. On a month-on-month basis, they had expected the consumer price index to rise 0.2 percent.
That puts inflation in the U.S. at its lowest since March 2021. It began rising then, as it has in many other countries, and by June last year it had reached 9.1 percent. That was the highest in 41 years, or since November 1981.
But so-called core inflation, which does not take into account volatile energy and fresh food prices, is not so favourable. It did fall this May, but only by two-tenths of a point to 5.3 per cent. On a month-on-month basis, core prices increased by 0.4 per cent, the same pace as in the previous month. Both these figures are in line with analysts’ estimates.
The important role of energy prices
A 3.6 percent decline in energy prices helped keep the CPI up on a month-over-month basis. Food prices rose 0.2 percent.
However, the largest contributor to the increase in the overall index was a 0.6 percent increase in housing prices. Housing-related costs accounted for about one-third of the weight of the index. Among other items, prices of used vehicles increased by 4.4 percent, the same as in April. Prices for transportation services rose 0.8 percent.
Source Czech Press Office
