US inflation rose in line with forecasts in May, although so-called “core inflation” came in lower than expected as the effects of President Trump’s tariffs still have yet to significantly boost consumer prices.
The Consumer Price Index rose 2.4% in May from a year earlier, matching economists’ expectations according to the Wall Street Journal.
The number was slightly above April’s reading of 2.3%, the Bureau of Labor Statistics said Wednesday.
Core inflation, which excludes volatile food and energy prices, came in at 2.8%, in line with the previous month and below expectations for a 2.9% rise.
On a month-to-month basis, core inflation was up just 0.1% — well below the 0.3% that had been forecast.
Drops in car and apparel prices, which have been expected to show some of the earliest impacts from tariffs, helped drive lower-than-expected readings.
The shelter index, however, rose 3.9% versus a year ago and was the main driver of inflation last month, according to the government.
The Dow Jones Industrial Average and the S&P 500 index were both poised to rise early Wednesday following the release of the data.
The inflation numbers come as the Federal Reserve has been in wait-and-see mode, hesitant to slash interest rates amid heightened uncertainty due to Trump’s ever-changing trade policies.
Trump, however, has continued to pressure Fed Chair Jerome Powell to cut rates.
Central bankers await a report on wholesale prices on Thursday and its preferred gauge, the personal consumption expenditures price index, on June 27.
