WASHINGTON: U.S. consumer prices recorded the largest gain in more than two years in May, led by the increases in gasoline prices, the Labor Department said here the other day.
Consumer Price Index (CPI), a main gauge of inflation, went up 0.4 percent in May on a seasonally adjusted basis, following a 0.1 percent increase in April and rising for the fourth consecutive month. In the month, the gasoline index increased 10.4 percent and accounted for most of the increase in the CPI.
On a year-on-year basis, the index was unchanged before seasonal adjustment.
Excluding the volatile food and energy categories, the so- called core CPI, rose 0.1 percent in May on a seasonally adjusted basis, lower than April’s increase of 0.3 percent. The core CPI was up 1.7 percent from a year earlier.
The improved headline CPI data was one of the signs that the modest inflation pressure beginning to build.
U.S. Federal Reserve chair Janet Yellen said on Wednesday that energy prices have stabilized, which means that the downward pressure from low oil prices on inflation is diminishing. Inflation is one of the two criteria for the Fed in deciding the monetary policy.
The Fed on Wednesday signaled that it was on track to move the benchmark interest rate this year despite the lower-than-expected economic outlook and stressed that the first interest hike in almost nine years would be appropriate only after further improvement in the labor market and greater confidence that inflation would rise.
