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The Consumer Price Index (CPI) was flat in May following a 0.3% increase in April, the Bureau of Labor Statistics reported this week, marking the first time in almost two years the CPI was flat month over month.
Prices increased 3.3% year over year, down from the 3.4% annual bump in April. Both the monthly and annual rates were 0.1 percentage points below economists’ predictions.
Food inflation was up 0.1% in May after being flat in April, with food away from home up 0.4% and food at home unchanged. Among the major grocery store indexes, inflation for dairy was down 0.5%, thanks to a 1.3% drop in milk, while nonalcoholic beverages dipped 0.3% monthly. Fruit and vegetable prices were flat, while meats, poultry, fish, and eggs, along with cereals and bakery products, both rose 0.2% monthly.
“Prices are still too high, but today’s report shows welcome progress on lowering inflation,” President Biden said in a statement on Wednesday, noting that, among other efforts to “lower costs for hardworking Americans,” he’s “calling on grocery chains making record profits to lower grocery prices.”
In other retail categories: Apparel prices were up 0.8% annually but down 0.3% from April, personal care products were also down 0.3% monthly but up 1.3% from a year ago, and alcoholic beverages at home were up 1.4% annually and 0.2% monthly.
As inflation showed signs of cooling, retail sales were up last month. The National Retail Federation’s CNBC/NRF Retail Monitor showed that retail sales in May, excluding automobiles and gasoline, rose 1.35% from April (the largest jump in more than a year, NRF president and CEO Matthew Shay noted) and just over 3% year over year. The Commerce Department is set to release its retail sales data for May on June 18.