US Consumer Inflation Falls Before Fed Interest Rate Decision

US consumer inflation continued to cool last month, according to US government data published Wednesday, giving the US Federal Reserve some positive news shortly before it publishes its latest interest rate decision.

The annual consumer price index (CPI) came in at 3.3 percent in May, down 0.1 percentage point from April, the Labor Department said in a statement.

This was slightly lower than the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

The monthly inflation rate was unchanged from a month earlier, below expectations of a 0.3 percent rise.

Much of the easing of inflation came from a sharp drop in the index for gasoline, which fell by 3.6 percent from a month earlier, while shelter prices rose by 0.4 percent.

A widely-watched inflation measure excluding volatile food and energy prices also eased last month, rising at an annual rate of 3.4 percent, and by 0.2 percent from a month earlier, according to the Labor Department.

Wednesday's data is unlikely to sway the Federal Reserve's plans to leave its key lending rate unchanged later on Wednesday.

However, it bodes well for the prospect of interest rate cuts this year, and could push some Fed policymakers to pencil in two rate cuts this year instead of one, as some analysts had feared.

The data also supports President Joe Biden administration's messaging that the US economy has turned a corner ahead of November's presidential election, which is expected to pit Biden against Republican candidate Donald Trump.