U.S. inflation steady in May with goods prices dropping, prompting possible interest rate cut

From Nasdaq.: 2024-06-28 11:07:14

U.S. inflation held steady in May, with services costs rising but goods prices dropping significantly. This may prompt the Federal Reserve to consider cutting interest rates later in the year. Consumer spending saw a slight increase, indicating a possible “soft landing” for the economy without a recession or high unemployment.

In May, the PCE price index remained flat as goods prices fell by 0.4%, the largest decline in six months. Services costs increased by 0.2%, driven by higher prices for housing, utilities, and healthcare. Core inflation rose by 2.6% year-on-year, meeting economists’ expectations for stable price growth.

Consumer spending in the U.S. rose by 0.2% in May, supported by a resilient labor market and strong wage gains. Personal income increased by 0.5%, with wages rising by 0.7%. Despite higher borrowing costs and inflation, real consumer spending rebounded by 0.3%, hinting at growth in consumption this quarter.



Read more at Nasdaq.: U.S. Inflation Steady in May as Goods Prices Drop