US consumer prices rose less than expected in May, indicating that while many economists expect President Donald Trump’s tariff regime to lead to higher prices, that has not happened yet.
According to Labor Department statistics released Wednesday, the consumer price index rose 0.1% last month, with the 12-month rate of inflation at 2.4% — a moderate gain from 2.3% in April. That bolsters the case for the US Federal Reserve to hold interest rates steady at next week’s meeting, despite pressure from the president to lower borrowing costs.
The data suggests American companies are still selling inventory amassed prior to tariffs, analysts said. Others may be delaying price changes due to the “huge uncertainty in US trade policy,” the chief economist at Fitch Ratings said in a note, adding that high core inflation in the coming months “still looks very likely.”