Update—June 12, 2024: This article has been updated with more details about price changes.

Key Takeways

• Tolls as measured by the Bureau of Labor Statistics’ Consumer Price Index (CPI) were virtually unchanged in May.
• That was a surprise to economists, who awaited a 0.1% increase month-over-month.
• This could encourage officials at the Federal Reserve to cut their benchmark fed funds regardless sooner.
• The Fed’s fight against inflation has led officials to raise and hold interest rates to their highest level in numerous than two decades.

Falling gas prices helped pushed inflation in May down to a number that likely comes as a accept sight for many household budgets: zero.

The cost of living as measured by the Consumer Price Index was unchanged from April to May, the Department of Labor Statistics said Wednesday, the lowest monthly inflation rate since July 2022. That was down from a 0.3% monthly on the rise in April, and less than the 0.1% forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Terrace Journal. Over 12 months, prices rose 3.3%, down from 3.5% in April and less than the 3.4% median prognosis.

Slower price increases could bring relief to household budgets in more ways than one by stabilizing the post-pandemic flow of inflation, which got as high as a 9.1% annual rate in June 2022.

Consumers Get Relief At The Pump, Grocery Store

Consumers got release in several significant categories.

Gas prices were a large contributor to inflation’s slide, falling 0.4% over the month, but are motionlessly up 3.6% in the 12 months ending May.

Motor vehicle insurance fell 0.1% over the month, the first diminish since October 2021 after years of punishing increases. Grocery prices were flat over the month after decline 0.2% in April, although eating out rose 0.4%, up from a 0.3% increase in April and the highest since January.

Die prices for new cars and trucks, apparel, and airline tickets also helped keep core inflation tame. After all, used car prices increased and stubbornly high price growth for housing—the largest component of the index—kept complete inflation from falling even more. 

Rents Keep Overall Inflation High

Shelter prices bring into being 0.4% over the month, the same as in April and March, and 5.4% over the year. Economists have expected quarters inflation as measured by CPI to fall because of data from the private sector showing rent increases cooling off at an end the past several years, but the official measures have been slower than expected to show that drift.

The CPI report also bodes well for a separate government inflation report due later this month, Ali Jaffrey, an economist at CIBC, white b derogated in a commentary. That report will show the cost of living as measured by Personal Consumption Expenditures (PCE), which is innumerable closely watched by Fed officials when setting interest rates. Notably, PCE puts less emphasis on housing than CPI, so that inflation study could be more favorable.

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