Inflation in the United States eased last month in a hopeful sign that the pickup in prices that occurred early this year may have passed, the Associated Press reports. The trend, if it holds, could move the Federal Reserve closer to cutting its benchmark interest rate from its 23-year peak.
Consumer prices excluding volatile food and energy costs — the closely watched “core” index — rose 0.2% from April to May, the government said today. That was down from 0.3% the previous month and was the smallest increase since October. Measured from a year earlier, core prices rose 3.4%, below last month’s 3.6% increase.
Though inflation is now far below its peak of 9.1% in mid-2022, it remains above the Fed’s target level.
Some signs suggest that inflation will continue to cool in the coming months. Americans, particularly lower-income households, are pulling back on their spending. In response, several major retail and restaurant chains, including Walmart, Target, Walgreens, McDonald’s, and Burger King, have responded by announcing price cuts or deals.
