Inflation Rose 3.3% In May, Less Than Economists Expected

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The Consumer Price Index (CPI) in the United States rose by 3.3% in May, a slower pace than the 3.4% increase in April, according to data released by the Bureau of Labor Statistics. This figure is lower than economists' expectations and marks the lowest monthly headline reading since July 2022.

The report also showed that on a monthly basis, prices remained flat, marking the first time since July 2022 that the CPI did not rise on a monthly basis. A significant drop in gas prices, which fell 3.6% from April, contributed to the slower inflation rate. However, shelter inflation, which rose 0.4% for the fourth consecutive month, offset the decline in gasoline prices.

Core inflation, which excludes volatile food and energy prices, increased by 0.2% over the prior month and 3.4% over the previous year. Both measures were cooler than April's data and lower than economist estimates.

The inflation report arrived ahead of the Federal Reserve's policy decision. Despite the lower-than-expected inflation rate, the Federal Reserve is not expected to cut interest rates until it is confident that inflation is moving sustainably downward. The current data does not provide that confidence, according to Fed Chair Jerome Powell.

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