US consumer prices rise moderately in May
WASHINGTON, June 11 (Reuters) - U.S. consumer prices increased marginally in May amid cheaper gasoline, but inflation is expected to accelerate in the coming months on the back of the Trump administration's import tariffs.
The Consumer Price Index (CPI) increased 0.1% last month after rising 0.2% in April, the Labor Department's Bureau of Labor Statistics (BLS) said on Wednesday. In the 12 months through May, the CPI advanced 2.4% after gaining 2.3% in April.
Economists polled by Reuters had forecast the CPI climbing 0.2% and increasing 2.5% year-on-year.
Excluding the volatile food and energy components, the CPI gained 0.1% after rising 0.2% in April. In the 12 months through May, the so-called core CPI inflation increased 2.8% after rising 2.8% in April.
The Federal Reserve tracks different inflation gauges for its 2% target. The U.S. central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range next Wednesday while policymakers monitor the economic impact of the tariffs.
Inflation has been slow to respond to President Donald Trump's sweeping tariffs as most retailers are selling merchandise accumulated before the import duties took effect.
Economists expect inflation to heat up through the second half of the year. Walmart (WMT.N), opens new tab last month said it would begin raising prices in late May and June.
The CPI data will come under close scrutiny in the months ahead also for another reason. Last week the BLS, which also compiles other economic releases including the closely watched employment report, announced the suspension of CPI data collection in three cities because of resource constraints.
The BLS like all government agencies has been severely affected by mass firings, voluntary resignations, early retirements and hiring freezes, which are part of an unprecedented campaign by the White House to drastically reduce the size of government and remake it.
The BLS has also announced that it would, effective with the release of the July Producer Price Index (PPI) data in August, end the calculation and publication of about 350 indexes. That would include data from PPI industry, commodity, final demand-intermediate demand and special index classifications.
Economists said that the BLS had with the CPI data reported a rise in the share of categories for which prices were calculated using a method called different cell imputation, which some viewed as less accurate.
But the BLS said on Tuesday its published data met rigorous standards. It, however, did not address staffing issues.
"Data quality is evaluated through measures of variance, bias studies, and assessments of survey methods," the agency said in a statement to Reuters. "BLS continues to evaluate data quality."
A former BLS commissioner told Reuters that staff levels were considerably low at the agency.
"I understand that BLS staffing is down by at least 15% now, that's not reflected in any official numbers yet, because many of them are still being paid," said Erica Groshen. "They are not at work and it is impinging on the agencies. Also the hiring freeze means that they can't be replaced."
Groshen said the CPI report remained reliable, noting an increased shift towards electronic collection of data.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Aircraft startup JetZero to invest $4.7 bln over a decade in North Carolina HQ
June 12 (Reuters) - U.S. aircraft startup JetZero, which has secured investments from United Airlines and Alaska Airlines, will invest $4.7 billion over a decade on a production facility and headquarters in North Carolina, the state said on Thursday. The deal contains more than $1.1 billion in state performance incentives that would be paid over nearly 40 years and are contingent on JetZero creating over 14,000 jobs between 2027 and 2036, a state representative said. The company will manufacture its 250-seater Z4 blended wing bodied aircraft at an airport site in Greensboro, the state and company said in statements. JetZero would also benefit from an additional $450 million in infrastructure improvements to the airport facilities, along with city and county incentives, the representative said. JetZero, which has a conditional order for up to 100 fuel efficient airplanes from United, and options for another 100, is the latest startup to reach a deal for a factory at Piedmont Triad International Airport, with supersonic jet maker Boom recently opening a facility at the site. Aerospace companies are growing their footprint in the U.S. south, fueled by strong demand for aircraft and parts and comparatively lower costs than traditional U.S manufacturing hubs, although recruiting experienced labor remains a challenge. Several startup aviation firms are seeking to revolutionize travel by developing planes that emit fewer emissions to help airlines meet industry net zero targets, along with battery-powered aircraft that can take off and land vertically. But entry barriers remain high in an industry that is capital intensive, with some startups struggling in recent years.
NBC News
an hour ago
- NBC News
Trump signs resolutions blocking California's pro-EV rules
President Donald Trump signed three resolutions on Thursday barring California from mandating electric vehicle sales and setting tailpipe emissions standards designed to galvanize the transition away from combustion engines. The resolutions undo California's 2024 landmark decision to ban new gasoline-powered car sales by 2035 and revoke the federal waiver that allows California to set its own tailpipe emissions standards under the Clean Air Act. Seventeen states representing 30% of the U.S. vehicle market had adopted the plan, which Trump has called California's 'EV mandate.' With Trump's move, the 17 states will no longer be able to enforce California's standards mandating electric vehicle sales by 2035. Trump also repealed California's plan requiring a rising number of zero-emissions heavy-duty truck sales. 'We officially rescued the U.S. auto industry from destruction by terminating the California electric vehicle mandate once and for all,' Trump said at a White House news conference. California Gov. Gavin Newsom said in a statement that the state will be suing to 'stop this latest illegal action by a President who is a wholly-owned subsidiary of big polluters.'
Telegraph
an hour ago
- Telegraph
FTSE 100 closes at record high as Trump's tariffs shake faith in US
Britain's main stock market index closed at an all-time high on Thursday as investors seeking refuge from America's market slump turned towards the UK. The FTSE 100 index of London's largest companies ended 0.2pc higher on Thursday at 8,834.92 points amid a backlash against Donald Trump's economic policies, which investors fear will hinder American companies' profits. The flagship British index, which had performed poorly in recent years compared with the US, is up by 8.7pc since the start of the year, beating America's S&P 500's which has risen by 2.7pc. Neil Wilson, of Saxo Bank said: 'We have clearly seen a rotation in global equity markets as investors have for the first time in years questioned the 'Tinata' – there is no alternative to America.' He said clients were talking about 'reducing exposure to the US'. The FTSE 100's record high came as the value of the dollar plunged to a three-year low after President Trump sparked fresh fears about global trade. The US currency sank on Thursday to its lowest level since March 2022 against a group of major peers, leaving it down by nearly 10pc so far this year. Investors have turned away from the dollar after the US president said he would send out letters to countries outlining the terms of trade deals. That sent the pound to a three-year high above $1.36 and pushed the euro to close at $1.16, its highest level since 2021, as the president's comments renewed concerns that US tariffs could hit global growth. 'I love China' In a further sign of his mixed signals on trade, President Trump sought to calm nerves by talking up the prospects of a US-China trade agreement, following two days of talks between Washington and Beijing officials in London this week. He wrote on his Truth Social platform: 'THE CHINA DEAL IS GREAT!' He later told reporters: 'I love China. We just made a deal, and I respect President Xi a lot, and we made a deal that's good for both countries. The deal we made with China good for both countries. Going to be a lot of money made, and it's going to ultimately open up China, which is the ultimate thing.' Charu Chanana, of Saxo Bank, said: 'Markets may have no choice but to respond to Trump's tariff threat – even if it's just posturing to bring others to the table.' The dollar was also hit by a flurry of data, which suggested the global economy was beginning to show signs of strain. Britain's goods exports to the US plunged at a record pace after President Trump launched his tariff onslaught in April, official figures showed. UK exports to the United States fell by £2bn compared with the previous month, according to the Office for National Statistics, which was the largest drop since official records began in 1997. The value of goods exports to the United States during the month – totalling £4.1bn – fell to its lowest level since February 2022. The US president hit Britain with 10pc tariffs under plans announced on April 2, a date which Mr Trump had long touted as his so-called 'liberation day'. Businesses dramatically changed their investment plans in response, bringing forward orders in an effort to get ahead of higher import taxes before they were announced. Official figures showed UK manufacturing output fell by 0.9pc in April, a further drop from 0.8pc in March but a sharp reversal from a 2.4pc surge in February. This was despite the high-profile announcement by Sir Keir Starmer of a trade agreement with the US last month, which is yet to be finalised. Robert Wood, an economist at Pantheon Macroeconomics, said: 'Exports should begin to stabilise in May now that the front-running has unwound and after President Trump began walking back some of his more ruinous tariffs. 'That said, the UK-US trade deal 'agreed' in May is yet to fully come into force so there could be further export weakness still ahead.' In a further sign of strain in the US, wholesale inflation ticked higher last month. The producer price index – which measures inflation before goods hit consumers – rose by 2.6pc in May, according to the Labor Department. This was up from 2.4pc in April but in line with expectations. Separate data showed US filings for jobless benefits were unchanged last week.
