The Labor Department reported that U.S. inflation was modest in the month of May, largely due to the impact of seasonal adjustments that turned energy price increases into declines, overall consumer prices rising just 0.2 percent, now up 3.6 percent from a year ago.
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Analysts were expecting no change in May after a string of price increases in recent months that had the three-month annualized rate of inflation at over five percent and the six-month annualized rate at over four percent.
Perhaps more importantly (at least for Fed economists), after a gain of 0.2 percent in April, the ?core? rate of inflation (excluding food and energy) jumped 0.3 percent in May, its largest increase since July 2008. On a year-over-year basis, core inflation is now at 1.5 percent.
By category, despite what you may have seen at gas stations last month, energy prices fell after seasonal
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