ALBAWABA - According to the most recent data from the Bureau of Labor Statistics, the median change in prices for an average bought basket of items and services, Consumer Price Index, decreased by 0.1% from May, contributing to a decrease in the annual rate of inflation to 3% from 3.3% in May.
The Bureau of Labor Statistics’ report indicated that the first month-on-month dip since May 2020 was brought about by falling gas costs in addition to a decrease in the cost of new and used cars, as CNN reports, with consumer prices growing at their weakest rate since June 2023, mirroring the lowest annual rate since early 2021.
The recent inflation data, indicating a return to the Fed’s 2% target, follows a short-term inflation surge earlier this year that has led to reduced expectations for interest rate cuts among officials, who asserted that a sustained period of moderate price increases is necessary before they consider lowering the key rate from its highest level in 23 years.
The short-term inflation spike earlier this year has led officials to lower their expectations for interest rate cuts, stating that a sustained period of moderate price increases is required before they consider lowering the key rate from its highest level in 23 years, according to the Associated Press.
The recent inflation data, which came out of expectations, indicates a return to the Fed's 2% target and possibly a shift in its overlook regarding a potential drop in interest rates.
Luke Tilley, chief economist at Wilmington Trust wealth management firm, stated as per AP that “this confirms that there is very little chance of inflation re-accelerating and that it’s time for some rate cuts from the Fed.”
The Bureau of Labor Statistics reported on Friday that nonfarm payroll employment increased by 206,000 in May, above experts' expectations of over 190,000, Yahoo notes. Unexpectedly, nevertheless, the jobless rate increased to 4.1% from 4% in the previous month, marking the highest reading in almost three years.
