Downside surprise in May CPI as energy prices weigh
The cost of living in the US continued to fall last month amid a sharp drop for energy prices and apparel, bringing the country to the brink of deflation.
According to the Department of Labor, the consumer price index dipped at a 0.1% month-on-month rate in May, dragging the year-on-year rate of advance down from April's 0.3% pace to 0.1%.
Economists forecasts had called for no change on the month and for the annual pace of price increase to remain at 0.3%.
A 1.8% on the month drop in energy prices was the chief culprit, together with a 2.3% fall in prices for apparel and a 0.4% decline in the cost of used cars and trucks.
Prices for medical care commodities and services on the other hand rose by 0.1% and 0.6%, respectively, while those for shelter were up by 0.2%.
But the biggest gain was seen in food prices, which jumped by 0.7%.
At the core level, which excludes food and energy, CPI also retreated by a tenth of a percentage point versus April (consensus: 0.0%), dragging the annual rate of change from 1.4% to 1.2% (consensus: 1.3%).