An inflation index that is closely monitored by the Federal Reserve tumbled last month to its lowest level since April 2021, pulled down by lower gas prices and slower-rising food costs. At the same time, consumers barely increased their spending last month, boosting it just 0.1%, after a solid 0.6% gain in April. The inflation index showed that prices rose 3.8% in May from 12 months earlier, down sharply from a 4.4% year-over-year surge in April. And from April to May, prices ticked up just 0.1%. Retired Ripon College economist Paul Schoofs says last month’s progress in easing overall inflation was tempered by an elevated reading of “core” prices, a category that excludes volatile food and energy costs. Friday’s report from the government suggested that consumer spending is slowing under pressure from high prices and interest rates, a trend that is also likely cooling inflation. As a result, many economists think growth in the current April-June quarter will slow from the 2% annual pace in the first three months of the year.
