U.S. consumer prices excluding food
and energy rose last month by the most since August 2002,
reflecting higher costs for public transportation, medical care
and housing.
The core consumer price index rose 0.3 percent, three times
faster than economists’ forecasts, after holding steady in each of
the previous two months. The Labor Department in Washington said
the overall index was unchanged in May, tempered by a drop in
energy prices, after falling 0.3 percent.
The larger-than-expected rise in the core may allay concerns
among some economists and Federal Reserve policy makers that a
broad-based fall in prices, or deflation, has started to take
root, posing an immediate threat to the economy. With interest
rates low, demand may strengthen and help prevent such a sustained
drop in prices, economists said.
Bloomberg News
