The Federal Reserve’s preferred measure of underlying US inflation decelerated in May, bolstering the case for lower interest rates later this year. The so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 0.1% from the prior month.
According to the Commerce Department, housing starts fell 5.5% to a 1.3 million annualized rate in May. That was the slowest pace in four years. Building permits, which give a guide to future construction, fell 3.8%, also the weakest since 2020.
A key measure of underlying US inflation stepped down for a second month in May, a pleasant surprise for Federal Reserve officials looking for signs that they can start to lower interest rates.
The Fedral Reserve's preferred measure of underlying US inflation moderated in April and consumers dialed back their spending, supporitng plans for an eventual reduction in interest rates.
The ISM manufacturing number for April was released on Wednesday. It came in at 49.2, below the 50.0 threshold for determining expansion or contraction.
The first quarter of 2024 was a record-setting one for the markets. The Dow Jones Industrial Average, the S&P 500 Index and Nasdaq Composite all hit all-time highs during the first three months of the year in response to positive economic signals an stronger earnings momentum.