Gas prices plummet in Southern US as inflation dips America
Energy costs fell by 2.3% last month in the Southern region, led by a 3.6% reduction in gasoline prices, according to the Labor Department's consumer price index. And in the last 12 months, gasoline prices have fallen by a whopping 22.3% in the region, composed of 16 states and the District of Columbia.
Released Tuesday, the federal government's consumer price index serves as an inflation gauge prepared monthly by the Bureau of Labor Statistics. The index measures the average change over time of what urban consumers pay for daily goods and services such as food, clothing, shelter, fuel, transportation fares and charges for doctors' and dentists' services.
Now that inflation has fallen to 4% nationally, down from 8.6% a year prior, forecasters have indicated that the Federal Reserve is expected to abstain from another rate hike Wednesday following a historic 14-month wave of interest rate increases.
All told, consumer costs have risen by 0.2% in the last month and 4.4% in the past year in the nation's southern region -- comprised of Alabama, Florida, Kentucky, Maryland, Mississippi, Texas and 10 other states. Though food costs have risen by 7.1% in the past 12 months, residents may have experienced a near imperceptible rise in the cost of groceries in May as food prices rose by 0.1%.
Energy costs have continued their downward trend, having fallen by 12.6% since last May. In addition to gasoline, electricity and natural gas prices also fell between April and May, down 0.6% and 2.2%, respectively.
The price for used cars and trucks was also among the notable goods to increase in price in May, up 3.3%.
Housing costs rose by 0.7% in May, meaning that rent itself has increased by 11.2% in the past year.
More Context
What was the percentage increase in shelter prices over the last year?
Inflation in the NortheastAs inflation continues to cool across the US, Northeast may continue to feel pinch
Inflation in the MidwestFood costs on the rise in the Midwest, even as US inflation levels continue to dip
Inflation in the WestAs US inflation continues to cool, consumer costs largely on the rise in West
May marked the 11th straight month that inflation slowed across the United States, providing Americans with relief at both the gas pumps and grocery stores.
Consumer prices increased 4% last month from last May, the smallest yearly increase since March 2021, but still higher than the Federal Reserve's 2-3% inflation target. That increase is also down from 4.9% in April and a 40-year high of 9.1% last June, according to the Labor Department's consumer price index.
Prices rose 0.1% from April to May following a 0.4% increase from March to April.
The index for shelter was the largest contributor to the monthly increase, followed by an increase in the index for used cars and trucks, according to the report.
The food index increased 0.2% in May -- including a 0.1% increase to grocery prices -- after being unchanged in the previous two months. Restaurant prices increased by 0.5% and are up 8.3% over the past year.
Meanwhile, the energy index declined 3.6% as energy commodities like gasoline and oil, as well as energy services such as electricity and utilities, all fell. Gas prices alone fell 5.6% in May, down nearly 20% from a year ago.
Other indexes that saw a decrease in May include household furnishings and operations, as well as airline fares.
Nationally, price increases have largely eased, which is part of the reason the Federal Reserve is expected to pause its series of aggressive interest rate hikes meant to staunch the fallout of inflation. However, the Fed's concern with core prices -- which exclude volatile food and energy items and better capture longer-term trends -- may mean another interest hike is in the horizon in July.
More Context
What policy measures are being taken by the Federal Reserve to mitigate rising inflation?
The Fed will announce its official interest rate decision Wednesday afternoon after the ending of its next policy meeting. That announcement will also include a summary of economic projections of what it expects inflation, employment, interest rates, and economic growth to be in coming years.