Consumer inflation in the United States declined for the 11th straight month in May to 4 per cent on a year-on-year basis from 4.9 percent in April, the US Bureau of Labor Statistics (BLS) reported on Tuesday. The update comes as the US Federal Bank officials on Tuesday started the two-day policy meeting on whether there is a need to do more to fight inflation.
“The all items index increased 4.0 per cent for the 12 months ending May; this was the smallest 12-month increase since the period ending March 2021,” the US Labor Department said.
Further details of the publication also revealed that the Core CPI inflation, which excludes volatile food and energy prices, edged lower to 5.3 per cent. On a monthly basis, the CPI and the Core CPI rose 0.1 per cent and 0.4 per cent, respectively.
After the US Federal Bank’s aggressive campaign of raising the benchmark lending rate ten times consecutively since early last year, it is widely expected to take a break this week.
However, According to an AFP report, analysts have warned that policymakers at the Fed are probably seeking a more consistent pattern of an economic slowdown before they conclude their series of interest rate increases.
The US labor department data showed that inflation in many sectors is still rising in particular, measures of housing costs, including rents, continue to climb sharply. There have also been steep price rises for beer, women’s clothing, and services from car maintenance to school fees.
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According to the news agency AFP, US markets jumped after data showed inflation slowed further in May, raising hopes that the Federal Reserve will pause its interest rate-hike campaign.
The report said that the S&P 500 and Nasdaq reached new one-year highs following a report indicating a modest increase in consumer prices during May. The stock indices on Wall Street saw gains at the opening, and European markets also climbed. As higher interest rates typically benefit the dollar, it weakened against other major currencies.
Meanwhile in India, The government data showed that retail inflation dropped to 4.25 per cent in May from 4.7 per cent in April.