Energy Index Down 1% as Gasoline and Natural Gas Weaken
The energy index was a key drag on headline inflation, falling 1.0% in May. Gasoline prices fell 2.6%, while natural gas declined 1.0%. On a 12-month basis, energy prices are down 3.5%, driven largely by a 12% drop in gasoline and an 8.6% decline in fuel oil. Electricity, in contrast, increased 0.9% in May and 4.5% over the year. The softness in energy may provide relief for consumers but could suppress inflation expectations.
Food and Shelter Support Headline CPI
The food index rose 0.3% in May, rebounding from a 0.1% decline in April. Both food at home and food away from home increased by 0.3%, with full-service and limited-service meals contributing evenly. Over the past year, food prices climbed 2.9%, with sharp gains in eggs (+41.5%) and meat categories supporting the uptrend. Shelter, which accounts for a