Yearly inflation rate falls to lowest level since April 2021

Inflation in the U.S. slowed to 4% in May when measured year over year – the lowest 12-month figure since April 2021 and a further sign inflationary pressures are easing.

Consumer prices in the United States rose just 0.1% from April to May, according to data released Tuesday by the Bureau of Labor Statistics, a number driven by tumbling gas prices, a much smaller rise in grocery prices than in previous months and less expensive furniture, airfares and appliances, The Associated Press reported.

Adjusted for seasonal patterns, gas prices fell 5.6% from April to May and are down nearly 20% from a year ago. Grocery prices ticked up 0.1%, though they’re still 5.8% higher than they were a year ago.

Still, core prices remained high last month, climbing 0.4% from April to May, the sixth straight month of increases at that level or higher. Compared with a year ago, core inflation dropped to 5.3% from 5.5%, still far above the Federal Reserve’s target of 2%.

Last month’s core inflation was fueled mostly by high apartment rental costs and a second straight jump in used car prices, which leaped 4.4% from April to May. An economist told AP that those two factors alone accounted for four-fifths of the core price monthly increase in core prices.

However, most analysts expect those costs to slowly ease in the months ahead, AP said. Wholesale prices of used cars declined last month, for example, which may foretell lower retail used-car prices in coming months.

Paula Wolf is a freelance writer

Mortgage rates slip below 5%

For the first time since April, the 30-year mortgage rate average has fallen under 5%. Freddie Mac’s Primary Mortgage Market Survey, released Thursday, showed the average for a 30-year, fixed-rate mortgage was down to 4.99%.

The week before, the average was 5.3%. A year ago, a 30-year, fixed-rate mortgage averaged 2.77%.

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth,” Sam Khater, Freddie Mac’s chief economist, said in a release. “The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.” According to the survey, a 15-year, fixed-rate mortgage averaged 4.26%, down from 4.58% the previous week and 2.1% a year ago.

Paula Wolf is a freelance writer