U.S. Inflation Eases In May But Prices To Remain High

Consumer price increases in the United States likely slowed sharply last month, extending a steady easing of inflation over the past year. But a gauge of underlying prices may still reflect persistent inflation pressures, Christopher Rugaber reported for the Associated Press (AP).

Photo Insert: The Fed tends to focus on “core” prices, which exclude volatile food and energy costs and generally provide a clearer view of inflation.

Prices are forecast to have risen 4.2% in May from a year earlier, well below the 4.9% year-over-year increase in April, according to a survey of economists by the data provider FactSet.

And measured from April to May, prices are expected to have increased only 0.1%, compared with the previous month’s 0.4% increase.

The Fed tends to focus on “core” prices, which exclude volatile food and energy costs and generally provide a clearer view of inflation. And the data that the government will release Tuesday will likely show much less improvement in core prices.

Instead, core prices are expected to have risen by an uncomfortably high 0.4% from April to May — the sixth straight month of increases of that pace or higher. Measured year over year, though, core inflation is forecast to have slowed from 5.5% to 5.3%.

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