The Strategist

U.S. inflation slows to lowest level in more than two years

06/14/2023 - 10:15

With an annual rate of 4%, US inflation dropped in May to its lowest level since March 2021.

According to the US Department of Labor, US inflation dropped in May to its lowest level since March 2021 at an annualized rate of 4%. Consumer price increase in the United States peaked at 9.1% in June 2022 and has been progressively dropping ever since. The country's inflation rate was 5% in March 2023 and 4.9% in April.

In May, the annualized pace of the so-called core consumer price index, which excludes the cost of food and energy, fell to 5.3%. However, starting December 2022, these costs have been increasing by 0.4% each month (the increase in February 2023 was 0.5%). This important pricing indication is one that the U.S. Federal Reserve (Fed) constantly monitors, and it is still rising.

The agency notes that decreased energy and food prices, which have reached levels last seen prior to the outbreak of the conflict between Russia and Ukraine in February 2022, are helping to slow overall inflation. Despite this, inflation is stable and higher than the Fed's 2% target.