Consumer prices rose less than expected in May as President Donald Trump’s tariffs had yet to show significant impact on inflation, the Bureau of Labor Statistics reported Wednesday.
The consumer price index, a broad-based measure of goods and services across the sprawling U.S. economy, increased 0.1% for the month, putting the annual inflation rate at 2.4%. Economists surveyed by Dow Jones had been looking for respective readings of 0.2% and 2.4%.
Excluding food and energy, core CPI came in respectively at 0.1% and 2.8%, compared to forecasts for 0.3% and 2.9%. Federal Reserve officials consider core a better measure of long-term trends, with several expressing concerns recently over the impact that tariffs would have on inflation.
Continued weakness in energy and services prices helped offset some of the increases, and a handful of other key items expected to show tariff-related increases, vehicle and apparel prices in particular, actually posted declines.
Energy declined 1% on the month, while new and used vehicle prices posted respective declines of 0.3% and 0.5%. Food increased 0.3% as did shelter, which the BLS said was the “primary factor” in the otherwise modest CPI increase. Apparel prices also posted a 0.4% drop.
The BLS report comes with the Trump administration continuing in efforts to negotiate trade deals. In his April 2 “liberation day” announcement that rocked financial markets, Trump slapped 10% universal duties on U.S. imports and a host of other so-called reciprocal tariffs on countries he said have been using unfair trading practices.
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