Today’s inflation update for May was ripe with conflicting signals. There’s enough here for inflation hawks as well as doves to keep the debate bubbling until the next round of numbers. Headline inflation slowed last month to a 0.2% rise on a seasonally adjusted basis, down from 0.4% in April. But core inflation, which excludes food and energy, accelerated, rising 0.3% in May—the fastest monthly pace in nearly three years. That’s still well within the Fed’s 1%-to-2% target range, but the fact that core’s rate delivered a rare increase above headline’s pace raises warning flags by some accounts.

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Consumer Prices in U.S. Probably Rose in May at Slowest Pace in Six Months
Bloomberg | June 15
The cost of living in the U.S. probably rose in May at the slowest pace in six months as fuel costs waned, economists said before a report today. The consumer-price index increased 0.1 percent after a 0.4 percent gain in April, according to the median forecast of 79 economists surveyed by Bloomberg News. The so-called core measure, which excludes more volatile food and energy costs, may have increased 0.2 percent for the fourth time in five months.

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