U.S. May CPI rose 0.1% on the headline and core
U.S. May CPI rose 0.1% on the headline and core. There were no revisions to April's respective gains of 0.3% and 0.1%. Those left the 12-month growth rate slowing to 1.8% y/y overall, versus 2.0% y/y, and the core at 2.0% y/y from 2.1% y/y. All of the monthly changes were small. Energy prices dipped 0.6% from 2.9% and breaks a string three straight months of gains. Transportation costs slid 0.3% from the prior 1.2% gain. Services prices were up 0.1% from 0.3%, and housing costs also were up 0.1% from 0.3%. Food/beverage prices rose 0.3% from -0.1%. Apparel was unchanged from -0.8% and -1.9% in March. Real average hourly earnings rose 0.2% from -0.1%, leaving the y/y clip at 1.3% from 1.2% previously. Meanwhile, it may take several months before analysts see the impact of the May 10 increase in tariffs to 25% from 10%. The tame CPI report should support Treasuries and sustain expectations for a Fed easing sooner rather than later.