The inflation rate in the US showed signs of easing in May 2023, with the lowest year-over-year (YoY) rise since March 2021. The consumer price index for all urban consumers (CPI-U) increased by a mere 0.1 per cent on a seasonally adjusted basis in May, a deceleration from the 0.4 per cent increase recorded in April, according to the US Bureau of Labor Statistics.

The 12-month inflation rate was pegged at 4 per cent before seasonal adjustment, marking the smallest annual increase since March 2021.

The energy sector showed a significant decrease in May. The energy index dropped by 3.6 per cent, pulling down the inflation figures, as all the major energy component indexes recorded a dip. In contrast, the index for all items, excluding food and energy, posted an increase of 0.4 per cent in May, matching the rises in April and March, as per the US Bureau of Labor Statistics.

Notable gain was seen in the apparel index (up 0.3 per cent). Meanwhile, for the 12 months ending in May, the energy index showed a substantial decrease of 11.7 per cent, while the food index increased by 6.7 per cent.

The decline in overall inflation, coupled with a robust US labour market, positively affected inflation-adjusted earnings. Real average hourly earnings in May saw a rise of 0.3 per cent from the previous month and a YoY increase of 0.2 per cent. This marked the first annual rise in real earnings since March 2021.

Fibre2Fashion News Desk (DP)

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US inflation moderates in May, smallest 12-month rise since Mar '21

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