Consumer prices in the US rose less than anticipated in May, with limited evidence so far that President Donald Trump’s tariff measures have had a material impact on inflation.
The data, released by the Bureau of Labor Statistics (BLS) on Wednesday, showed that overall inflation remains contained, easing concerns of an immediate price shock.
The consumer price index (CPI), which tracks a wide basket of goods and services, rose 0.1% in May, bringing the annual inflation rate to 2.4%.
Economists polled by Dow Jones had expected a slightly higher monthly increase of 0.2%, though the year-on-year figure aligned with forecasts.
Core CPI, which excludes the more volatile food and energy categories and is considered a more reliable gauge of underlying inflation trends by the Federal Reserve, also rose 0.1% month-over-month.
On an annual basis, core inflation came in at 2.8%, below expectations of 2.9%.
Energy, vehicle prices weigh on headline numbers
The weaker-than-expected CPI reading was driven in part by a continued decline in energy prices, which fell 1% for the month.
Meanwhile, categories that were expected to reflect the impact of tariffs, such as vehicles and apparel, saw price drops instead.
New vehicle prices declined 0.3%, used vehicles fell 0.5%, and apparel prices slipped by 0.4%.
Shelter costs, which rose 0.3%, were cited by the BLS as the primary driver of the monthly CPI increase.
Food prices also increased by 0.3%, contributing modestly to the overall inflation figure.
While concerns have mounted in recent months about the inflationary effects of Trump’s trade policy, the latest CPI data suggest that those pressures may not have filtered through to consumer prices in a significant way—at least not yet.
Several Fed officials have expressed caution over the long-term inflationary implications of tariffs, particularly if trade tensions escalate further.
The Trump administration continues to pursue a series of trade renegotiations.
In early April, the White House imposed 10% duties on all US imports, along with additional reciprocal tariffs targeting countries accused of engaging in unfair trade practices.
The full impact of these measures on consumer prices may take time to materialize, particularly as businesses adjust supply chains and absorb costs.
For now, inflation appears to be holding steady, offering the Federal Reserve some breathing room as it evaluates future monetary policy decisions.
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