US headline inflation likely accelerated on gasoline prices in May

Gasoline prices in the US are expected to have stimulated the headline inflation figure again in May. The consumer price index is likely to have risen 0.3 percent in May, whereas the core rate is expected to have gained 0.19 percent for the second consecutive month in May, said Societe Geneale in a research report.

Gasoline prices, which are likely to have grown approximately 2.7 percent on a seasonally adjusted basis, might provide further stimulus to the energy index. In all, the energy measure is likely to have risen 1.8 percent, according to Societe Generale.

Meanwhile, apparel prices are expected to have remained subdued. It might have declined slightly by 0.1 percent. Used car prices might have dropped 0.5 percent in May. On the contrary, airfares are expected to have increased sharply by 2.2 percent, whereas hotel rates are expected to have rebounded by 0.5 percent. The medical care index growth is likely to have eased to 0.2 percent.

If the projections are true, the headline inflation is expected to remain at 1.1 percent y/y, whereas core rate is likely to edge higher to 2.2 percent, noted Societe Generale.