Used cars soared 4.7% from April to May, though they're still 2.2% cheaper than they were a year ago. Gas prices, which sank 5.6% just from April to May, have plunged 22% over the past year. Grocery prices edged up just 0.1% from April to May, providing some relief to consumers, though food costs are still 5.8% higher than they were a year ago. Nevertheless, they are coming under increasing pressures, with high prices, tightening credit and other indicators pointing to a slowdown on the way.”
“Consumers continue to be a pillar of support for the U.S. “The stickiness of core inflation continues to be the proverbial bee in the bonnet of policymakers at the Fed,” said Shernette McLeod, an economist at TD, a bank. That cooldown could lead the Fed to decide to skip a rate hike when it meets in September, after a widely expected increase at its next meeting in late July. As a result, many economists think growth in the current April-June quarter will slow from the 2% annual pace in the first three months of the year. From April to May, core prices increased 0.3%, a pace that, if it lasts, would keep inflation well above the Fed’s 2% target.įriday's report from the government suggested that consumer spending is slowing under pressure from high prices and interest rates, a trend that is also likely cooling inflation.
It was the fifth straight month that the core figure was either 4.6% or 4.7% - a sign that the Fed’s streak of 10 rate hikes over the past 15 months hasn’t subdued all categories of prices. Core prices rose 4.6% in May from a year earlier, down slightly from the annual increase of 4.7% in April.
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