US inflation cools in May; consumer spending up slightly

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US prices were unchanged in May while consumer spending rose moderately, a trend that could draw the Federal Reserve closer to start cutting interest rates this year.

The flat reading in the personal consumption expenditures price index last month followed an unrevised 0.3% gain in April, the Commerce Department's Bureau of Economic Analysis said today.Economists polled by Reuters had forecast the PCE price index unchanged on the month and rising 2.6% year-on-year.

Excluding the volatile food and energy components, the PCE price index edged up 0.1% last month. That followed an upwardly revised 0.3% rise in April. The so-called core PCE price index was previously reported to have gained 0.2% in April. The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.5% range since last July. Though policymakers recently adopted a more hawkish outlook, financial markets expect the Fed to start its easing cycle in September.

Source: Loan Digest (loandigest.net)

Business Consumer Spending Inflation US Federal Reserve Us Inflation Personal Consumption Expenditures

 

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