This assures the Fed won't hike tomorrow. Odds down to 5%.

The core numbers are stubbornly high but the cherry on top is the fall in earnings and the revision lower in last month's earnings data. The big driver in core inflation was used car prices; stripping that out, core CPI was flat.

The shelter index increased 8.0% over the last year, accounting for over 60% of the total increase in all items less food and energy.


Note the June 2022 number there. That will be lapped in next month's report, knocking 1.2 pp off the year-over-year reading. Given the struggles of oil prices, there's a good chance we see CPI below 3% in June, which might turn a skip into something more.


The Consumer Price Index for All Urban Consumers (CPI-U) saw a slight 0.1% rise in May, as per the U.S. Bureau of Labor Statistics. Over the past 12 months, this index increased by 4.0% before seasonal adjustments. The largest contributor to the monthly increase was the shelter index, followed by the used cars and trucks index. The food index rose by 0.2% in May, with the index for food at home and away from home rising by 0.1% and 0.5% respectively. Meanwhile, the energy index dropped by 3.6% in May, with all its major components seeing a decline. The index for all items excluding food and energy increased by 0.4% in May, with the shelter index being a significant contributor. Several indexes, such as household furnishings and operations and airline fares, decreased over the month. In terms of annual performance, the all items index saw the smallest 12-month increase since March 2021, whereas the index for all items less food and energy rose by 5.3%.