- Thomas Costerg, a senior economist at Standard Chartered Bank
US consumer inflation recorded the largest monthly rise in May in more than two years, a sign inflationary pressures have started to build in the world's number one economy. The consumer price index increased a seasonally adjusted 0.4% in the reported month from April, according to the Labor Department, the largest gain since February 2013. The main upside contribution came from higher gasoline prices. At the same time the core measure, which excludes food and fuel, climbed 0.1%, the smallest increase so far this year, following the 0.3% rise in April. Measured on an annualized basis, overall prices remained unchanged, while core prices climbed 1.7%. The consumer-price index has now increased for four consecutive months after sliding from November through January. Yet, Federal Reserve policy makers are looking for signs of firmer inflation before they start to hike short-term interest rates from near zero. The central bank's preferred inflation gauge, the personal consumption expenditures price index, ticked up 0.1% from a year earlier in April. The measure has remained below the Fed's 2% annual inflation target for three years.
A separate report showed the number of Americans applying for unemployment benefits declined in the week ended June 13. Initial jobless claims dropped to 267,000 in the reported period, compared with 279,000 a week earlier.
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