Consumer Price Index Holds Flat in May, Slightly Below Expectations

The Consumer Price Index held flat in May 2024, though it increased 3.3% from a year ago. Both numbers were 0.1 percentage points below market expectations. Excluding volatile food and energy prices, core CPI increased 0.2% in May and 3.4% from a year ago, also slightly below forecasts. Energy prices dropped 2% in May, helping slow inflation, while food prices rose just 0.1%. Gas prices fell 3.6%. Shelter costs, including rent, continued rising fast increasing 0.4% in May and up 5.4% over the last year. Housing remains a major driver of inflation. The softer-than-expected CPI data reduced expectations the Federal Reserve will raise interest rates aggressively, with a rate cut now seen as possible in September.