The Bureau of Labor Statistics said that consumer prices edged down 0.1 percent in May, falling for the second time in the past three months. The lower figure mainly stemmed from reduced energy costs, down 2.7 percent, with gasoline prices off 6.4 percent. In contrast, food prices increased 0.2 percent for the second consecutive month. Over the past 12 months, food and energy costs have increased 0.9 percent and 5.4 percent, respectively. Overall, the consumer price index increased 1.9 percent year-over-year in May, its first reading below 2 percent since November. This suggests that the acceleration in pricing pressures that peaked at a 2.8 percent year-over-year rate in February has slowed since then. With that said, year-over-year consumer inflation was 1.0 percent in May 2016, suggesting that overall prices have still trended higher over the longer term.
Core consumer prices, which exclude food and energy costs, edged up 0.1 percent in May, mirroring its increase in April. Excluding food and energy costs, consumer prices have risen 1.7 percent over the past 12 months, pulling back from 2.0 percent in March and 1.9 percent in April. As such, overall pricing pressures remain modest and mostly under control for now.