Inflation in the United States finally showed signs of weakening in May. The Labor Department reported on Tuesday (13) that the consumer price index rose only 0.1% in May compared to the previous month, down from the 0.4% increase recorded in April.
Prices rose 4% annually. This was the slowest inflation growth rate since March 2021. Although inflation has cooled from a peak of 9.1%, it remains more than double the pre-pandemic average and above the Federal Reserve’s 2% target.Food prices rose
In contrast to the overall index, food prices increased in May after falling in March and April. Overall, food prices were 5.8% higher in May than a year ago.
Some food items became slightly more expensive over the year.
Margarine increased by 22.5%, flour by 17.1%, bread by 12.5%, and sugar by 11.1%. Meanwhile, juices and other non-alcoholic beverages rose by 9.9%, lettuce by 9.4%, ham by 8.2%, and — brace yourself — ice cream increased by 8%.
A variety of factors caused food prices to rise. Extreme weather, the war in Ukraine, avian flu, and higher costs throughout the supply chain led to increased prices. And with rising food sales – even though consumers are buying fewer items – these prices are likely to remain high.And what about interest rates?
This report is the last before the U.S. Federal Reserve’s monetary policy meeting on Wednesday (14) and is expected to have significant implications for the country’s policymakers’ decisions. Interest rates have been raised 10 times in a row over the past 15 months in an attempt to curb runaway inflation.
The slowdown in inflation likely gives policymakers additional leeway to avoid another interest rate hike. Experts believe the Fed will pause interest rate increases.Source: Fox News and CNN