CPI Falls A Whopping 0.3% In May

5 dollars, 5 bucks, five dollars, five bucks, price

Photo: Flickr / debairdâ„¢

UPDATE: CPI fell a bigger than expected 0.3 per cent in May, surpassing analyst expectations for 0.2 per cent.Excluding food and energy, CPI rose 0.2 per cent.

Today’s number puts year-over-year inflation at 1.7 per cent, well below the Federal Reserve’s target 2 per cent rate of price growth.

We’ll see if this can sway the Federal Open Market Committee to take stronger action when they meet to discuss monetary policy on June 19-20.

 

ORIGINAL: We’ll see May data on consumer prices out in just a few moments at 8:30 AM ET.

Analysts polled by Bloomberg predict that prices will fall 0.2 per cent month-over-month after a prior reading of no change in the index in April. That would put CPI at 1.8 per cent year-over-year, down from 2.3 per cent.

CPI excluding food and energy is expected to rise by 0.2 per cent, the same rise as it clocked last month.

This might be the biggest data point to watch this morning because it is likely to inform the next meeting of the Federal Reserve Open Market Committee on June 20. The FOMC said that inflation falling below two per cent could trigger stronger action from the Fed, and many investors are still hopeful that we’ll see new easing measures announced this month.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.