Jessica Rinaldi Reuters Inflation remained stubbornly high in May, although the monthly increase was slightly lower than expected, according to a Commerce Department meter closely monitored by the Federal Reserve. Prices of basic personal consumer spending rose 4.7% year-on-year, 0.2 percentage points lower than the previous month, but are still around the levels last seen in the 1980s. measurement around 4.8%. On a monthly basis, the measure, which excludes volatile food and energy prices, rose 0.3%, slightly less than the Dow Jones estimate of 0.4%. Core inflation, however, jumped higher, rising 0.6% for the month, much faster than the 0.2% gain in April. This kept annual inflation at 6.3%, the same as in April and slightly lower than the 6.6% in March, which was the highest price since January 1982. In addition, the report reflected pressures on consumer spending, which account for nearly 70% of total US economic activity While personal income increased by 0.5% in May, above the estimate of 0.4%, income after taxes and other charges or disposable personal income decreased by 0.1% per month and 3.3% compared to last year. Expenditures adjusted for inflation decreased by 0.4%, declining sharply from a profit of 0.3% in April, although they increased by 2.1% on an annual basis. Inflation of goods increased by 9.6%, while prices of services increased by 4.7%, both of which increased by 0.1 percentage point since April. The percentage of personal savings increased to 5.4%, increased by 0.2 percentage points compared to the previous month. Fed officials are keeping a close eye on the data as they seek to control hidden inflation. Central bank policymakers generally monitor the core of inflation more closely, believing that monetary policy is less effective in controlling fluctuations in gas and grocery prices. However, Fed Chairman Jerome Powell said in recent days that he also closely monitors newspaper headlines and gas prices averaging about $ 4.86 a gallon. The consumer price index, which measures a wide range of goods and services and is more closely monitored by the public, rose by 8.6% in May, its highest level since late 1981. In other economic news Thursday, the Labor Department said unemployment applications fell to 231,000 for the week ending June 25. This was a decrease of 2,000 from the previous period, although 1,000 higher than the estimate. Outstanding claims, which are one week behind the title, totaled 1.33 million, a slight decrease from the previous week.
