U.S. CPI Is Unchanged in May; Core Price Gain Moderates

The Consumer Price Index was unchanged during May following a 0.3% April rise and two consecutive 0.4% increases. A 0.1% rise had been expected in the Action Economics Forecast Survey. The 3.3% y/y gain compared to April’s 3.4% y/y increase but was below the peak 9.1% y/y increase in June of 2022. The three-month increase of 2.8% (AR) was below the 4.6% April high. Prices excluding food & energy increased 0.2% last month after rising 0.3% in April and 0.4% in each of the prior three months. Core consumer prices rose 3.4% y/y compared to 3.9% during all of last year.

The CPI less food, energy and shelter, another measure of core pricing power, held steady in May after nine consecutive moderate increases. The 1.9% y/y rise remained below the 7.6% y/y peak in February 2022 and compared to a low of 1.2% y/y in February 2021.

Service costs less energy increased 0.2% in May (5.3% y/y) following a 0.4% April gain and two straight 0.5% increases. Transportation services costs declined 0.5% (+10.5% y/y) following a 0.9% April jump. The cost of shelter rose 0.4% (5.4% y/y) for the fourth straight month as owners’ equivalent rent of primary residences increased 0.4% (5.6% y/y), also for the fourth consecutive month. Rents of primary residences increased a steady 0.4% (5.3% y/y) while the cost of lodging away from home eased 0.1% (-1.4% y/y) after a 0.2% decline. Education & communication prices rose 0.3% (2.0% y/y) following two straight 0.2% increases. Recreation services prices fell 0.2% (3.9% y/y) following a 0.3% rise and medical care service costs rose 0.3% (3.1% y/y) after a 0.4% increase.

During May, the CPI for goods less food & energy was unchanged (-1.7% y/y) after two months of modest decline. Education & communication goods costs declined 1.6% (-7.4% y/y) following a 0.1% April uptick. Prices for recreation products eased 0.1% (-2.3% y/y) after holding steady. Home furnishings prices were unchanged (-2.5% y/y) after weakening 0.4%, while appliance costs rose 0.6% (-4.9% y/y) after three straight months of decline. Apparel prices eased 0.3% (+0.8% y/y) after strengthening 1.2% in April. New vehicle prices eased 0.5% (-0.8% y/y) after three straight months of decline while used car & truck prices rose 0.6% (-9.3% y/y) after falling 1.4% in April.

Energy prices declined 2.0% (+3.7% y/y) in May after two straight months of 1.1% increase. Gasoline prices fell 3.6% (2.2% y/y) after a 2.8% rise. Amongst other energy products, fuel oil prices fell 0.4% (+3.6 y/y) after rising 0.9% in April. Electricity prices held steady (+5.9% y/y) after easing 0.1%, while natural gas prices declined 0.8% (+0.2% y/y) after falling 2.9% in April.

Food prices edged up 0.1% (2.1% y/y) last month after holding steady in April. Egg prices weakened 0.4% (+3.0% y/y) after falling 7.3%. Meat, poultry & fish prices rose 0.3% (2.3% y/y) after easing 0.1% while cereal & bakery product prices rose 0.2% (0.2% y/y) after rising 0.6% in April. Fruit & vegetable prices held steady (+0.6% y/y) after falling 0.8%, while dairy prices fell 0.5% (-1.0% y/y) after a 0.1% uptick. Nonalcoholic beverage prices fell 0.3% (+1.3% y/y) about as they did in April.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.