Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Consumer prices up 2% for the year

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- A key index of consumer prices fell in May, but it was up 2% over the past 12 months, the government said Thursday.

The Consumer Price Index, the Labor Department's key measure of inflation, fell by 0.2% in May on a monthly basis. Economists surveyed by Briefing.com expected a 0.1% drop.

The government report attributed most of the month-to-month decline to the energy index, which fell by 2.9% in May. The gasoline index fell by 5.2% in May, and was down 27% over the year.

"Up to this point, the U.S. economy has been the beneficiary of an 'inflation-less' recovery," said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors, in a research note.

"While [some] point to the risk of inflation down the road," he added, "there is still sufficient slack in the economy to keep price levels from moving higher."

Core CPI and inflation: The closely watched core CPI, which excludes volatile food and energy prices, ticked up by 0.1% in May after being unchanged in April. That matched economists' expectations.

It was only the second monthly increase in core CPI so far this year. The rate is down by 0.9% over the previous 12 months.

"The core inflation rate remains uncomfortably low," Baird said. "The economy may be expanding, but at a pace that isn't inspiring."

The core rate is a gauge of inflation. Experts say concerns are sparked only when core CPI rises consistently by 0.2% or more each month.

"Muted inflation, and the risk of deflation, seems likely to provide the Fed continued incentive to maintain its accommodative stance," Baird said. To top of page

Index Last Change % Change
Dow 21,580.07 -31.71 -0.15%
Nasdaq 6,387.75 -2.25 -0.04%
S&P 500 2,472.54 -0.91 -0.04%
Treasuries 2.23 -0.03 -1.50%
Data as of 10:47am ET
Company Price Change % Change
General Electric Co 25.91 -0.78 -2.92%
Bank of America Corp... 23.80 -0.14 -0.58%
Advanced Micro Devic... 13.88 0.08 0.58%
Microsoft Corp 73.79 -0.43 -0.58%
Chesapeake Energy Co... 4.69 -0.15 -3.10%
Data as of Jul 21
Sponsors

Sections

The Congressional Budget Office narrows its projection for when Treasury will run short on money if Congress doesn't raise or suspend the country's debt ceiling. More

The newly revamped Citi Prestige card offers 75,000 sign up points and a fourth night free at hotels. But you have to spend $7,500 in the first three months to get the offer. More