Business

A months-long streak of cooler inflation trends continued in May, the Bureau of Labor Statistics said on Wednesday.

Why it matters: Many economists project that President Trump's tariffs will reignite inflation this year, but so far effects from the trade war are not apparent in official economic data.

By the numbers: On a monthly basis, the overall Consumer Price Index and the core measure — which excludes food and energy prices — both rose 0.1%, slowing from the 0.2% increase in April.

• Year over year, CPI rose 2.4% in the 12 months ending in May, up a tick from the 2.3% increase the prior month but still better than forecasters expected.
• Core CPI rose 2.8%, the same as in April.

Details: Prices fell in some of the categories anticipated to be hit by tariffs, where cost increases might ultimately pass through to the consumer.

• Apparel prices, for instance, fell 0.4% in May — the second month of declines. New car prices fell by 0.3% last month.

Between the lines: The government compiled the inflation data last month, when the Trump administration ended what was effectively an embargo on U.S.-China trade.

• The two nations announced a deal last month that brought the tariff rate for Chinese imports down to 30% from 145%.
• The administration announced a framework late Tuesday that would push the previous deal forward and could help ease shortages of critical rare earth minerals.

What to watch: While the White House has touted lower inflation rates under its watch, the benign inflation data is unlikely to be seen by Wall Street economists as an "all-clear" signal for the economy.

• Instead, economists expect higher tariffs to show up in inflation reports down the line as businesses work through goods stockpiled before tariffs took effect.
• The Federal Reserve begins a two-day policy meeting next week. No change to interest rates is expected, though officials will release fresh projections for inflation and employment.