It feels like slightly better news this morning. The US Consumer Price Index (CPI) ticked up just 0.1% in May, falling short of the 0.2% forecast. That brings the headline number down from projections and also revises the April gain from 0.3% to 0.2%. The core CPI, which excludes the volatile food and energy sectors, also saw a 0.1% increase, coming in 0.2% below expectations and matching its reading in March.
Looking at the annual numbers, the headline CPI rose 2.4% over the past 12 months, aligning with what many economists were expecting. The core CPI, however, climbed 2.8% year-on-year – a tenth of a percent below forecasts. It's also noteworthy that the core rate has held steady at 2.8% for three consecutive months now.
These numbers, while showing a slight cooling from what was expected, still represent historic highs. The overall CPI index itself reached an all-time peak of 321.465, a figure dating back to 1913. Even the core index, which started its record in 1957, hit a new high of 326.854.
The data has clearly had an impact. Markets opened positively today, reflecting hopes that persistent high inflation might be easing. Interest rates have dropped noticeably, settling around 4.44%.
Of course, the picture isn't entirely clear. While the monthly numbers are softer than anticipated, the year-over-year figures remain stubbornly above the Federal Reserve's 2% target. This creates a bit of a puzzle.
And then there's the ongoing debate about the data itself. Some folks are questioning the accuracy of the Bureau of Labor Statistics' methods, suggesting factors like potential government hiring freezes could be skewing the results. It's a hot topic among economists right now. The latest figures are certainly fueling the discussion.