Key inflation gauge rose last month while Americans cut back on spending
Washington – A key inflation gauge increased in May in May in the last sign that prices remain stubbornly high while the Americans have reduced their expenses.
Prices increased by 2.3% in May, against a year ago, against only 2.1% in April, the trade department announced on Friday. Excluding the volatile categories of food and energy, basic prices increased by 2.7% compared to the previous year, an increase of 2.5% in the previous month. The two figures are slightly higher than the target of 2% of the federal reserve.
At the same time, the Americans have reduced spending for the first time since January, because overall expenses dropped by 0.1%.
Inflation figures suggest that the wide prices of President Donald Trump still have only a modest effect on prices. The costs of certain goods, such as toys and sports items, have increased, but these increases were partly offset by the fall in the prices of new cars, airline prices and apartments, among other articles.
On a monthly basis, in fact, inflation was mainly tamed. Prices increased only by 0.1% in May from April, according to the Commerce Department, the same as the previous month. Basic prices increased by 0.2% in May, more than economists waited and greater than 0.1% last month.
The weakness of the expenses in part probably reflects the reduced purchases of cars and other manufactured products after the Americans have intensified their expenses on these spring items to get ahead of the prices.
