U.S. consumer price inflation likely to have remained unchanged sequentially in May

The U.S. consumer price inflation is likely to have remained the same in May on a sequential basis. The CPI index in April had risen 0.2 percent, partly recouping the earlier month’s 0.3 percent loss. Energy prices that tend to be a considerable factor in the sequential headline performance, rose 1.1 percent on the month.

However, the core consumer price environment continues to be weak. In April, core inflation was up a modest 0.1 percent, whereas the annual core inflation rate slipped below 2 percent for the first time since October 2015. The three-month annualized rate of core inflation has also dropped from its recent high, indicating toward further moderation in the year-on-year rate in the months ahead.

According to a Wells Fargo research report, the CPI is expected to have been unchanged in May, with the year-on-year rate decreasing to 1.9 percent. While the inflation has been softer as compared with the initial expectations, the overall economic growth outlook continues to be in the place, added Wells Fargo. Also, the recent weak inflation prints are unlikely to deter Fed officials from hiking rates at the June meeting.