Inflation in the U.S. eased in May for a second straight month, a hopeful sign that a pickup in prices that occurred early this year may have passed. The trend, if it holds, could move the Federal Reserve closer to cutting its benchmark interest rate from its 23-year peak.
Consumer prices excluding volatile food and energy costs—the closely watched “core” index—rose 0.2% from April to May, the government said Wednesday. That was down from 0.3% the previous month and was the smallest increase since October. Measured from a year earlier, core prices rose 3.4%, below last month’s 3.6% increase.
Fed officials are scrutinizing each month’s inflation data to assess their progress in their fight against rising prices. Even as overall inflation moderates, such necessities as groceries, rent and health care are much pricier than they were three years ago—a continuing source of public discontent and a political threat to President Joe Biden’s reelection bid. Most other measures suggest that the economy is healthy: Unemployment remains low, hiring is robust and consumers are traveling, eating out and spending on entertainment.
Overall inflation also slowed last month, with consumer prices unchanged from April to May, in part because of sharp falls in the cost of gasoline, airfares and new cars.
