The numbers: In May, the prices of goods brought into the U.S. from other countries dropped by the most since the end of last year. This is more proof that inflation may be slowing down again.
There was a 0.4% drop in the import price index last month. According to polls done by the Wall Street Journal, nothing will change.
It helped that petrol prices went down, but the government said that import prices still went down by 0.3% even when energy costs were taken out.
After going down for a long time, the price of imports went up sharply in the first four months of the year. This caused a small rise in U.S. inflation.
Even Jerome Powell, the head of the Federal Reserve, and other top officials were interested in the rise.
Powell said on Wednesday, two days before the May import price index came out, “There’s been an unexpected rise in import prices on goods, which is kind of hard to understand. You know, we’ve taken some signal from that.”
Still, both consumer and wholesale prices levelled off in May, which gave people hope that the rise in inflation is mostly over.
Important facts: The price of imports went up 1.1% in the year ending in May, the same amount as the month before.
Americans can buy foreign goods and travel abroad for less money because the dollar is strong.
Inflation is still higher than it was before the pandemic, but if prices keep going down this summer, the Federal Reserve could cut rates as early as September.
The Fed wants to bring down the rate of inflation to 2% per year. Prices are going up about 3% a year right now.
In the future: Jeffrey Roach, chief economist at LPL Financial in Charlotte, N.C., said, “Both import and export prices fell from a month ago, adding to the story that inflation is getting better around the world.”
The Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) both went down on Friday.
