Consumer Price Index Jumps 0.4%

The Consumer Price Index (CPI) jumped a seasonally adjusted 0.4% for May, according to a Labor Department report (link opens as PDF) released today. 

After increasing 0.3% in April, analysts' 0.2% expectations for May proved too pessimistic. Investors have been keeping an especially watchful eye on the CPI lately, as strong growth means stand-alone inflation -- a signal that the Fed might back off buying bonds to spur inflation.

Source: Labor Department 

According to the report, May's increase was a widespread result of price boosts primarily from shelter, electricity, food, airline fares, and gasoline. The overall index hasn't registered a month-to-month gain this large since February 2013, and the food index hit an almost three-year high.

Excluding more volatile food and energy prices, the CPI still managed to beat expectations, clocking in at 0.3% versus 0.2% estimates. 

Over the last 12 months, the CPI has headed 2.1% higher, with price gains from both food (+2.5%) and energy (+3.3%). 

Despite May's strong CPI growth, a single month of better-than-expected inflation won't be enough to spur any unusual Federal Reserve action. Investors and analysts will need to wait for at least another month of data before jumping to conclusions about whether the Fed will step up its tapering tactic.

Discover a top stock pick for 2014
Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2997218, ~/Articles/ArticleHandler.aspx, 9/16/2014 11:51:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement