WASHINGTON (dpa-AFX) - A closely watched report released by the Labor Department on Wednesday showed a slight increase by consumer prices in the U.S. in the month of May.
The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.
Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.
'Despite sticky inflation, tariffs have not yet showed up in consumer prices, but a lot depends on the absorption rate of U.S. companies and foreign suppliers,' said Eric Teal, Chief Investment Officer for Comerica Wealth Management.
He added, 'We believe that the majority of the tariffs will eventually get passed to the consumer, but companies are cautious at this juncture about passing along the price increase.'
The monthly uptick by consumer prices largely reflected a continued increase by shelter costs, which rose by 0.3 percent for the second straight month.
Food prices also climbed by 0.3 percent amid higher prices for both food at home and food away from home, while energy prices slumped by 1.0 percent amid a steep drop by gasoline prices.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.
The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.
The modest monthly increase by core prices reflected the higher shelter costs as well as higher prices for medical care, motor vehicle insurance, household furnishings and operations, personal care, and education.
Meanwhile, the report said prices for airline fares, used cars and trucks, new vehicles, and apparel were among those that decreased in May.
The Labor Department is scheduled to release a separate report on producer price inflation in the month of May on Thursday.
Economists currently expect producer prices to rise by 0.2 percent in May after falling by 0.5 percent in April, while the annual rate of producer price growth is expected to accelerate to 2.6 percent in May from 2.4 percent in April.
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