Key Facts
• May US Consumer Price Index (CPI) to be released on June 11.
• Core CPI, excluding food and energy, expected to rise 0.3% month-on-month.
• Year-on-year core CPI forecasted to increase by 2.9%.
• Tariff costs gradually passed to consumers, driving inflation in goods.
• May CPI and June 12 Producer Price Index (PPI) critical for Federal Reserve’s June 17-18 meeting.
• Economists predict discretionary services’ slowdown to offset goods price increases.
• Sectors like furniture, clothing, and auto parts show partial tariff cost pass-through.
• Airfares significantly dropped; hotel and entertainment services show deceleration.
• Weekly jobless claims in late May hit highest level since October 2024.
• May nonfarm payrolls growth slowed but remained robust.
Summary
The May US Consumer Price Index (CPI), set for release on June 11, is expected to show a slight acceleration, driven by the gradual pass-through of tariff costs to consumers. Core CPI, excluding volatile food and energy prices, is projected to rise 0.3% month-on-month, marking the largest increase in four months, and 2.9% year-on-year. Economists suggest that while goods prices are rising, discretionary services are slowing, potentially softening the overall inflation impact. Key sectors like furniture, clothing, and auto parts exhibit partial tariff cost pass-through, while airfares and hotel services are declining. The CPI, alongside the June 12 Producer Price Index (PPI), will provide critical insights for the Federal Reserve’s June 17-18 meeting. Labor market indicators, including a rise in weekly jobless claims and steady nonfarm payrolls, further highlight mixed economic signals.
