U.S. consumer prices rose marginally in May, reflecting a slowdown in the pace of increases in the cost of gasoline, pointing to moderate inflation pressures.
Figures released Tuesday by the U.S. Labor Department showed the Consumer Price Index increased 0.2% also as food prices were unchanged. That followed a similar gain in the CPI in April. In the 12 months through May, the CPI increased 2.8%, the biggest advance since February 2012, after rising 2.5% in April.
Excluding the volatile food and energy components, the CPI rose 0.2%, supported by a rebound in new motor vehicle prices and a pickup in the cost of healthcare, after edging up 0.1% in April. That lifted the year-on-year increase in the so-called core CPI to 2.2%, the largest rise since February 2017, from 2.1% in April.
The department also said annual inflation measures are rising as last year's weak readings fall from the calculation. Economists had forecast both the CPI and core CPI rising 0.2% in May.
Inflation was published ahead of the start of the Federal Reserve's two-day policy meeting on Tuesday. The U.S. central bank tracks a different inflation measure, which is just below its 2% target.
The Fed is expected to raise interest rates for a second time this year on Wednesday. Economists are divided on whether policymakers will signal one or two more rate hikes in their statement accompanying the rate decision.
The Fed's preferred inflation measure, the personal consumption expenditures price index excluding food and energy rose 1.8% on a year-on-year basis in April, in line with March's increase.
