May inflation of 2.4% still hovers near 4-year lows

U.S. inflation last month continued to stay at the lowest pace since 2021 as May's higher prices for groceries and some imported goods were largely offset by cheaper gas, travel services, and rents.

Consumer prices increased 2.4% in May compared with 8.6% a year ago, according to a Labor Department report released Wednesday. That continues the trend from a 2.3% yearly increase in April. 

Excluding the volatile food and energy categories, core prices rose 2.8% for the third straight month. Economists pay close attention to core prices because they generally provide a better sense of where inflation is headed.

The cost of groceries, toys and games, and large appliances rose, which could reflect uncertainty about tariffs. Yet the price of new and used cars, clothes, airfares, and hotel rooms all dropped from April to May.

On a monthly basis, overall prices ticked up just 0.1% from April to May, down from 0.2% the previous month, with inflationary pressures appearing muted. Core prices also dropped to 0.1% from 0.2%.



(AP Photo Hau Dinh)