The pace of inflation continued to slow in May to the lowest point in more than two years.
On Tuesday, the latest consumer price index data (CPI), a measure of the price of goods and services, showed inflation rose 4% in May compared to the previous year.
That marked the lowest annual rate of inflation since Mar. 2021. And it was more than half of the peak of 9.1% in June 2022.
However, CBNC noted when energy and food prices were removed, “the picture wasn’t as optimistic.”
It pointed out, “So-called core inflation rose 0.4% on the month and was still up 5.3% from a year ago, indicating that while price pressures have eased somewhat, consumers are still under fire.”
Heather Long, an economic columnist for The Washington Post, tweeted that rent and shelter costs, restaurants, and used cars and trucks, were the main drivers of inflation.
Meanwhile, the cost of eggs, utilities, and gas has fallen.
What's driving inflation now?
— Heather Long (@byHeatherLong) June 13, 2023
1) Rent/shelter costs
2) Used cars and trucks
3) Restaurants
4) Car insurance & repair
Gas, utilities and egg prices have really cooled off. pic.twitter.com/Je5p2M2X5P
The Wall Street Journal noted, “Federal Reserve officials are meeting June 13-14 to decide their next steps to cool inflation, which they would like to see at 2%.”
“They could hold interest rates steady at the meeting, while preparing to increase rates again in the summer or the fall if they don’t think enough progress has been made on inflation,” it added.
In a statement, President Joe Biden reacted to the inflation news as he said, “Today’s report is good news for hard working families. It shows continued progress tackling inflation at the same time that unemployment remains at historic lows.”
“Annual inflation is now at the lowest level since March 2021, and less than half of what it was last June. After gas and grocery prices increased rapidly last year due to the war in Ukraine, inflation has fallen for 11 months in a row,” he continued.
He went on to tout his accomplishments in office.
Finally, Biden said, “We are just getting started. My Investing in America agenda is rebuilding our infrastructure, manufacturing, and supply chains here at home, and creating good-paying jobs. Under my administration, private sector companies have invested over $470 billion in manufacturing, and America is seizing leadership in the industries that will be critical to our economic security for decades, like semiconductors and clean energy.”
“I’ve never been more optimistic that our best days are ahead of us,” he added.