USA: Inflation falls – to 4% in May – more than expected
Inflation has slowed dramatically since April, when data showed a 4.9% increase in consumer prices over a year ago. However, the latest reading is still twice the Fed’s inflation target of 2%. Growth in the US economy slowed earlier this year due to lower business investment and so-called residential fixed investment, which includes money spent on home purchases and construction.
US gross domestic product grew at an annual rate of 1.1% in the three months ending in March, according to government data. A jobs report earlier this month showed that the labor market grew sharply in May, adding 339,000 jobs compared to Wall Street’s estimate of just 195,000. Economists now expect the central bank to pause a long series of rate hikes while waiting for more effects from the previous key rate hike.
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