US May Consumer Prices Fell 0.1%, Annual Increase Below 2.0%

India’s retail inflation rate drops to 2.18% the lowest since 2012

Policymakers continued to expect the economy to expand at a "moderate" pace and labor market conditions to "strengthen somewhat" further.

"From out of nowhere we have now had three months of unusual weakness in underlying prices", said Paul Ashworth, chief economist at Capital Economics.

United States consumer prices fell more than expected in May, according to the Department of Labor's monthly consumer price index (CPI).

The second drop in the CPI in three months followed a 0.2 percent rise in April.

Pay growth dropped to a weaker than expected 1.7% in the quarter, while inflation rose to 2.9% last month, resulting in a pay cut of £147 for the average United Kingdom worker.

Similarly, mining sector output grew at 4.2 per cent during the month under review compared to 6.7 year ago.

Core inflation, which excludes energy and food, rose a slight 0.1 per cent in May. In the 12 months through May, the CPI increased 1.9 per cent, the smallest increase since last November.

The 12-month overall price measure fell below the Fed's two per cent target to 1.9 per cent last month, continuing a steady decline since February, while the core, which has been falling since January, slipped another two-tenths to 1.7 per cent.


While the US central bank is expected to raise interest rates by 25 basis points at the end of a two-day meeting later on Wednesday, weak inflation, if sustained, could put further monetary tightening this year in jeopardy. Chair Janet Yellen said they were monitoring inflation developments closely.

He said the inflation slowdown was occurring at the same time that the unemployment rate has fallen to a 16-year low.

The dollar fell to a seven-month low against a basket of currencies on the data, before retracing some of the losses. The index, which tracks the greenback against the currencies of major U.S. trade counterparts, was above the 97 level before the data release. Those forecasts are far below the 3 percent annual growth the Trump administration has said it can achieve through tax cuts, deregulation and tougher enforcement of trade rules to protect American jobs.

Against the yen, the greenback fell by more than 1 percent following the data release to touch 108.95 yen, its lowest since April 21. The Fed also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise.

Consumer prices also declined in May, reflecting a big drop in energy prices and smaller declines in a number of other areas.

Economists have said they think consumer spending, which accounts for about 70 per cent of USA economic activity, will pick up in the spring and summer after a slow start to 2017.

"In terms of quarterly growth, the upward revision to April outweighs the downside surprise in May", said Chris Low of FTN Financial. The Atlanta Fed is forecasting GDP rising at a 3.2 percent annualized rate in the second quarter.

Related News:

  • Across the US, marches and rallies in support of LGBT rights

    Across the US, marches and rallies in support of LGBT rights

    Participants at the Real Pride March are being discouraged from bringing signs that mention organizations or corporations. Still others claim they have been outright banned from participating.
    Thiem stuns Djokovic, sets date with Nadal in French Open semis

    Thiem stuns Djokovic, sets date with Nadal in French Open semis

    Open final a year ago , but the Czech player had never been past the second round at Roland Garros in five previous appearances. Just a pretty bad set. "Obviously I love this sport". "Trust me, I'm thinking about many things", he said .

    Iran says terrorist groups attacked Tehran, third assault prevented

    One of the assailants later blew himself up inside, according to a statement issued by Iran's state news agency, IRNA . Bombers have targeted Iran's parliament and the shrine of the country's revolutionary founder Ruhollah Khomeini .
  • Former NBA player Dennis Rodman arrives in North Korea

    Former NBA player Dennis Rodman arrives in North Korea

    Rodman tweeted that he was "headed to North Korea" on behalf of PotCoin , a website that facilitates legal cannabis transactions. North Korean officials confirmed to CNN Rodman's arrival in Pyongyang but did not give any details of the visit.
    Binding of Isaac creator announces new game: The End is Nigh

    Binding of Isaac creator announces new game: The End is Nigh

    The gameplay seems pretty similar to Super Meat Boy , however, the atmosphere looks a bit darker in places. The player's job is to help him literally make a friend out of all the parts and pieces of people he finds.

    Senate Committee Hearing With Intelligence Chiefs

    Rogers replied: "I have never been directed to do anything I believe to be illegal, immoral, unethical or inappropriate". Coats was testifying Wednesday before the Senate intelligence committee.
  • Israel approves largest West Bank settlements in 25 years

    Turkey on Saturday condemned the approval of 2,500 additional Israeli settlements in Palestine's West Bank . The powerful settler movement wields heavy influence in Netanyahu's right-wing governing coalition.
    Militants kill 13 Philippine marines in wartorn Marawi city

    Militants kill 13 Philippine marines in wartorn Marawi city

    President Rodrigo Duterte had earlier threatened to throw out U.S. troops amid strained relations since taking office. The latest casualties bring the number of Philippine troops killed in the fighting to 58.

    Halep sets up final clash with Ostapenko

    It was clear from the start that Ostapenko was going to be the aggressor and she edged a first set in which she hit 21 winners. After a hard first set in which she fell to Halep, Pliskova battled back to level the match at one set apiece.
  • Pakistani PM hopes for swift solution to crisis over Qatar

    Pakistani PM hopes for swift solution to crisis over Qatar

    The Eritrean Information Ministry's statement of support on Monday came despite its previously close ties with energy-rich Qatar. Qatar, for its part, has denied the accusations, calling the moves to diplomatically isolate it as "unjustified".

    Kane equaliser a "huge moment" for young England team - Southgate

    The News Agency of Nigeria (NAN) reports that substitute Alex Oxlade-Chamberlain had put England in front in the 70th minute. However, Strachan said he was "too exhausted to think about where we are, I just want to go home".
    Alleged Russian hack reveals a deeply flawed election system

    Alleged Russian hack reveals a deeply flawed election system

    Both Seminole and Volusia county officials added that voter-registration records are in no way connected to ballot counting. Humboldt officials used VR Systems equipment during the November election, but are no longer using it, Sanders said.


Most liked

Apple removes Pepe The Frog game from its App Store
Ads display a small blue icon signifying an advertisement, but otherwise, they're almost indistinguishable from search results. The "malware scanning" app Lin spotted that aggressively pushes users to a $99.99 weekly subscription.

G7 unanimity on text without United States on Paris (2)
Climate Alliance and remain committed to achieving existing Carbon dioxide emission reduction goals (Green States). May told Trump at the time that the climate accord was a safety net for future generations.

Rafael Nadal Wins Historic 10th French Open Title
Thank you to the organisers, the other players, to all the people that make this tournament possible. Nadal clinched the summit clash with an emphatic 6-2,6-3,6-1 win over the third seed Wawrinka .

Alexis Sanchez set to re-unite with ex-manager
But, if reports from the forward's hometown are to be true, Alexis has already agreed to a move to another Premier League club. Since moving to North London in 2014, Sanchez has scored 72 goals in 144 appearances in all competitions.

Wonder Woman Collector's Edition Blu-ray box set revealed
Anyway, with the world going gaga for Wonder Woman right now, Square Enix's Play Arts Kai range is also getting in on the action. Let us know what you thought of Wonder Woman by giving the movie your own ComicBook.com User Rating below.

Congress demands President's Rule be imposed in MP
A day later, farmers have refused to call off the strike and the state is now witnessing a shortage of milk and vegetables. Similarly, Rs 4,400 crore went as crop insurance compensation sum past year .

Penguins regroup, Predators look for road magic in Game 5
Nashville still is allowing just 2.19 goals per game, but the Predators are being stretched by the NHL's top scoring team. Ron Hainsey , Penguins - If Hainsey scores, you know it is going to be good. "And that's just going to be like (that).

McCain says his confusing questions resulted from tiredness
After that exchange, McCain took his last few minutes to address part of Comey's testimony and "that thing" that Trump asked him. At the same time, he faulted Clinton for being "extremely careless" in the use of her private email and server.

Olivier Giroud Scored An Incredible Volley Right After Missing A Sitter
It was his 31st global goal, which puts him two behind Arjen Robben after the winger opened the scoring in the 21st. Granit Xhaka and Xherdan Shaqiri scored for Switzerland , who have 18 points from six matches.

Trump hails fallen, their families at Arlington
Afterward, he visited a section of the cemetery where military members killed in the wars in Iraq and Afghanistan are buried. He paid special tribute to two soldiers who died in Afghanistan , Army Capt.

Canadian Grand Prix: Mclaren Express 'Serious Concerns' Over 'Lost' Honda
The team's struggle for points so far this season - let alone wins - means a victory in the next three months is extremely unlikely.

Pro-Khalistan Slogans Raised In Golden Temple Complex
Dal Khalsa has also given a call for " Amritsar bandh" on Tuesday, and the police wanted to ensure that it would not succeed. They, however, told the community to free SGPC and other Sikh institutions from "possession" of anti-community people.

I told them "F#$k you, I'm Millwall": London hero's courageous story
In fighting back, Larner was knived eight times in the head, chest, hands and neck. "Like an idiot I shouted back at them. If Millwall is looking for a new slogan, they may have found it. " F*** you, I'm Millwall! " has a nice ring to it.

Southwest Airline's 72-hour sale includes $59 one-way flights from NY
Over the last week of the month, it was 1.04%, 5.75% over the last quarter, and 25.44% for the past six months. Palladium Partners Llc decreased Southwest Airls Co Com (LUV) stake by 16.65% reported in 2016Q4 SEC filing.

Even moderate drinking can damage the brain, claim researchers
The researchers noted that with an observational study like this, no firm conclusions can be drawn about cause and effect. Brain scans showed people who drank high levels of alcohol were more likely to have reduced white matter in the brain.