Senior Economist at NerdWallet, focused on economic data/trends, jobs, home affordability & consumer spending, saving, debt and credit. I also lead our data studies team.
Some inflation slowing was expected this month, but the data came in lower than those expectations — the datapoint measuring price changes from one month to the next showed no change. Big picture, this means prices didn’t move in May, which is good news in the battle against inflation. But we know that much can hide in these aggregates. Consumers encountering ongoing high prices don’t feel relief when prices don’t change, or when inflation slows. They may not feel increasing discomfort, but there’s certainly no relief. So while the big-picture price index didn’t change from April to May, and that’s bodes well for rate cuts later in the year, we can expect to see that continued disconnect between how people feel and how the #economy is actually doing. Shelter #inflation remains sticky — it’s been growing steadily at a 0.4% rate every month for the past four months. Both rent and the index that tries to capture ownership pricing changes rose at that same 0.4% rate in May. It’s the foot-dragging characteristics of elements helping to keep the overall CPI elevated. Another price that people don’t interact with on a daily basis — that of auto insurance — slowed in May. While it’s still growing about 20% annually, it fell slightly from April. Car owners renewing their policies have encountered the considerable rise in premiums over the past year, as insurers account for higher priced vehicles and repairs. Overall, today’s inflation numbers will be a welcome sight for the #Fed, though certainly not enough to push them to cut rates. We’ll hear from Chair Powell later today when he’s expected to announce no change to interest rates for the time being.
