US Inflation Rate Falls To 6-Month Low Of 1.9%

Consumer prices in the United States increased 1.9 percent year-on-year in May of 2017, easing from a 2.2 percent rise in April and below market expectations of 2 percent. It is the lowest inflation rate since November last year although it was still above the 1.6 percent average over the past 10 years. Core inflation slowed further to a 2-year low of 1.7 percent.

Year-on-year, energy prices rose 5.4 percent, lower than 9.3 percent in April. In addition, inflation slowed for services less energy (2.6 percent from 2.7 percent in April), namely shelter (3.3 percent from 3.5 percent), transportation services (2.9 percent from 3.1 percent) and medical care (2.5 percent from 3.1 percent). In contrast, prices went up faster for food (0.9 percent from 0.5 percent). 

Annual core inflation, which excludes food and energy eased to 1.7 percent from 1.9 percent in the previous month. It is the lowest core inflation since May of 2015 and below market expectations of 1.9 percent.

On a monthly basis, consumer prices fell 0.1 percent, following a 0.2 percent rise in April and compared to market expectations of a 0.1 percent gain. Energy cost fell 2.7 percent, mainly due to a 6.4 percent slump in gasoline prices and was the main downward contributor. The food index rose 0.2 percent, due to increases in four of the six major grocery store food group indexes. 

Excluding food and energy, consumer prices rose 0.1 percent, the same as in April and lower than expectations of 0.2 percent. The shelter index increased 0.2 percent while declines were recorded for apparel, airline fares, communication and medical care services.

US Inflation Rate Falls To 6-Month Low Of 1.9%

BLS | Joana Taborda |
6/14/2017 12:52:42 PM