USA: Inflation falls – to 4% in May

USA: Inflation falls – to 4% in May
US consumer prices rose 4% in May Compared to last year, it declined more than expected and reinforces hopes that inflation will return to normal levels. The data was released just hours before the Federal Reserve announced its latest interest rate decision, after a string of hikes in recent months.

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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