US consumer prices rose 4% in May compared to last year, putting inflation at its lowest annual rate in two years, according to the Labor Department.
Compared to last April, inflation increased by 0.1%, which reflects a slight relief in the pocket of taxpayers. However, they continue to struggle against high prices, especially in housing and used vehicles.
The numbers are positive for the country, although they are still well above the Federal Reserve’s 2% target. However, the report is expected to be enough to convince the Federal Reserve not to raise interest rates yet again.
The housing index was the biggest contributor to the monthly increase for all items, followed by an increase in the used cars and trucks index. Food prices rose 0.2% in May, according to the Bureau of Labor Statistics report.
The report fulfilled the forecast of economists, who expected a 4% annual increase, down from 4.9% in April. And regarding the monthly report, forecasts pointed to an increase of 0.1%, lower than the report of 0.4% in April.
The drop has been helped by gasoline prices, which have fallen steadily after historic increases last year, fueled in large part by the Russian invasion of Ukraine.
Nearly a year after inflation reached its highest point in 40 years of more than 9% in June 2022, analysts are now debating how fast inflation will continue to fall.
This is the eleventh consecutive month in which the consumer price index has fallen and although it is below the historic 9% of June 2022.
