U.S. “core” consumer prices climbed for a third straight month in May, rising 0.3% and topping expectations.
The increase likely seals another interest rate increase from the U.S. Federal Reserve when it meets at the end of the month.
May consumer prices increased by 0.4%, after climbing 0.6% in April, the U.S. Labor Department said Wednesday. “Core” consumer prices, which exclude food and energy items, grew 0.3% in May, the third-straight rise at that rate.
The core increase again topped analyst expectations, as it did in March and April. Wall Street economists had projected a 0.4% gain in consumer prices and 0.2% rise in the core.
Overall consumer prices were 4.2% higher than a year earlier. Core consumer prices grew 2.4% over that period.
Economists widely expect the Fed to raise interest rates by a quarter percentage point to 5.25% when it meets June 28-29. That would be the 17th-straight rate increase of 0.25% dating back to mid-2004.
Today’s reported showed that May energy prices climbed 2.4% from April. Gasoline prices last month increased 4.9%. Electricity prices fell 0.5%. Natural gas prices fell 0.9%.
Food prices were up 0.1%. Services prices rose 0.3% and were up 3.9% compared to a year ago.
Transportation prices increased 1.5%. Airfares rose 2.6%. Prices for new vehicles dipped 0.3%. Medical care prices increased 0.3%, while education and communication prices were unchanged. Clothing prices were up 0.2%.
Separately, the U.S. Labor Department said real average weekly earnings fell 0.7% in May compared to April.
U.S. “core” consumer inflation rises
Unexpected increase likely cements another interest rate hike
- By: IE Staff
- June 14, 2006 June 14, 2006
- 08:15