The growth of inflation in the United States cooled further last May, the Labor Department reported Tuesday, in an encouraging sign for authorities that seek to reduce the increase in prices to consumers.
As stated in a statement, the Consumer’s price index (CPI), a key indicator of US inflation, it rose 4.0% compared to the same month of the previous year, in line with analysts’ expectations and below the 4.9% increase in April.
This result places inflation at the lowest level in almost two years, and less than half the maximum record of 9.1% reached in mid-2022.
The data comes on the eve of the US Federal Reserve (Fed, central bank) to begin a two-day meeting in which the evaluation of the indices will influence its decision on a change in the reference interest rates.
Although the Fed has embarked on an aggressive rate-raising strategy, raising the benchmark interest rate 10 times in a row since the beginning of last year, it is expected to pause that policy this week.
Analysts warn that Fed policymakers are likely to wait for a more sustained trend of inflation cooling before halting rate hikes. In May, the US CPI rose 0.1% in May, against 0.4% in April, according to the Labor Department.
Core inflation, which excludes volatile food and energy prices, reached 5.3% in the last 12 months.
“The index for the housing item was the one that contributed the most to the monthly increase of all articles, followed by that of used cars and trucks,” the Department detailed.
Board Chairman Jerome Powell speaking to reporters said more hikes are to come as he battles rising prices.
The Fed is torn between continuing to raise rates or taking a breather
The members of the Federal Open Market Committee of the US Federal Reserve begin a meeting on Tuesday in which they will decide if the ten rate increases carried out in the last year are sufficient or if it is necessary to continue raising them.
While on previous occasions the rises were expected by most analysts, this time there is no consensus on what is going to happen. The Fed will report the decision tomorrow, Wednesday, and its president, Jerome Powell, will explain it at a press conference.
Most experts estimate that the ceiling that interest rates can reach has not yet been reached and that there will be more increases this year, although they see a possible temporary pause at this meeting in June and a possible new increase in July.
AFP
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