"who cares"- analyzing fractions of % that no one notices OK, it's only one good inflation report after a string of negative ones. But the consumer price index in May offers lots of glimmers of hope.
Take services, the biggest source of inflation the past few years. Services prices rose just 0.2% in May to mark the smallest increase since September 2021.
Another measure know as supercore inflation, meanwhile, showed no increase in May. The last time that happened was also in September 2021.
The supercore rate excludes energy, housing and goods and is seen as a proxy for labor costs, the single biggest expense for most businesses. The Federal Reserve has been worried that a labor shortage would drive up wages and make inflation harder to contain.
Two other numbers stand out. The three-month and six-month annualized rates of inflation also slowed sharply
The three-month annualized rate of core inflation, for instance, slowed to 3.3% from 4.1% and 4.5% in the prior two months. That would be the rate of inflation for the full year if it increased as fast as it did from March through May.
The six-month annualized rate of core inflation decelerated to 3.7% from 4%.
Those rates are still too high for the Fed, which is aiming for 2% annual inflation, but they are headed in the right direction.