Inflation up in May; president touts slowing rate of price increases

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Inflation rose 0.1% in May as food, rent, and car prices increased, but energy prices dropped.

The U.S. Bureau of Labor Statistics (BLS) published the Consumer Price Index Summary showing a 4% inflation rate for all items over the last 12 months. It was the smallest 12-month increase since the 12 months ending March 2021, according to BLS.

The index for shelter was the largest contributor to price increases in May, up 0.6% from April to May, and up 8% for the 12 months ending in May. Transportation services prices rose 0.8% month to month, and 10.2% over the year.

Food prices rose 0.2% for the month and by 6.7% for the year; food at home increased 0.1% in May and by 5.8% for the year, while prices for food away from home increased by 0.5% in May and by 8.3% for the last 12 months.

Energy prices dropped 11.7% from May 2022 to May 2023, and by 3.6% for the month. Gas prices were down 5.6% for the month and down 19.7% for the year. Fuel oil prices dropped 7.7% for the month and by 37% for the last 12 months.

New car and truck prices dipped 0.1% over the month, but rose 4.7% year on year. Used car and truck prices rose 4.4% for the month, but decreased 4.2% for the year. Fore the 12 months ending in May, motor vehicle insurance spiked by 17%.

The inflation rate was 0.6% monthly, and 4.4% yearly, for medical care commodities. Medical care service prices dipped 0.1% in May and for the 12 months ending in May 2023.

In a statement, President Joe Biden called the numbers “good news for hard working families.” He noted the annual inflation route was less than half what it was in June 2022. The Russian invasion of Ukraine caused a rapid price increase for gas and groceries last year, but inflation has fallen for 11 months in a row.

“While there is more work to do, the plan that I laid out a year ago to bring down the cost of living and sustain stable and steady growth is working,” the president’s statement said. “We have taken action to bring down the cost of gas at the pump, prescription drugs, and health insurance premiums. At the same time, the unemployment rate has remained below 4 percent for the longest stretch in more than 50 years, helping to support wage gains over the last year, even after accounting for inflation. More Americans are in the workforce than in decades.”

The president’s statement also acknowledged bipartisan work on reducing federal budget deficits, and private investment up to $470 billion in manufacturing.