A customer counts his money at the checkout while buying an item at the Best Buy store in Flushing, New York.
Jessica Rinaldi Reuters
Inflation remained persistently high in May, although the monthly increase was slightly less than expected, according to an indicator from the Ministry of Commerce, closely monitored by the Federal Reserve.
Prices of basic personal consumption expenditures increased by 4.7% compared to a year earlier, 0.2 percentage points less than in the previous month, but still around the levels last observed in the 1980s. Wall Street was looking for an indication of about 4.8%.
On a monthly basis, the measure, which excludes volatile food and energy prices, rose 0.3%, slightly less than the Dow Jones estimate of 0.4%.
However, core inflation rose, rising 0.6% for the month, much faster than the 0.2% gain in April. This kept inflation on an annual basis of 6.3%, the same as in April and slightly lower than in March 6.6%, which was the highest level since January 1982.
In addition, the report reflects the pressure on consumer spending, which accounts for nearly 70% of all economic activity in the United States.
While personal income increased by 0.5% in May, before the estimate of 0.4%, income after taxes and other fees or disposable personal income decreased by 0.1% compared to the month and by 3.3% compared to the previous year. Inflation-adjusted expenditures fell 0.4%, a sharp drop in profit of 0.3% in April, although it increased 2.1% year on year.
Commodity inflation rose by 9.6%, while service prices rose by 4.7%, both by 0.1 percentage points compared to April.
The percentage of personal savings increased, rising to 5.4%, to 0.2 percentage points compared to the previous month.
Fed officials are closely monitoring the data as they seek to control unexpected inflation. Central bank policymakers tend to monitor core inflation more closely because they believe that monetary policy is less effective in controlling the ups and downs of gas and food prices.
However, Fed Chairman Jerome Powell said in recent days that he also closely monitors headlines as well as gas prices averaging about $ 4.86 a gallon.
The consumer price index, which measures a wide range of goods and services and is more closely monitored by the public, rose 8.6% in May, its highest level since late 1981.
In other economic news Thursday, the labor ministry said unemployment applications fell to 231,000 for the week ended June 25. This is a decrease of 2,000 compared to the previous period, although 1,000 more than forecast.
Ongoing claims, which are one week after the headline, amount to 1.33 million, a slight decrease from the previous week.
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