U.S. inflation remained mostly tame last month

WASHINGTON (AP) — U.S. inflation remained mostly tame last month, though still above the Federal Reserve’s 2% target.

Consumer prices increased 2.4% in May compared with a year ago, according to a Labor Department report released Wednesday. That is up from a 2.3% yearly increase in April. Excluding the volatile food and energy categories, core prices rose 2.8% for the third straight month. Economists pay close attention to core prices because they generally provide a better sense of where inflation is headed.

There were scattered signs that Trump's tariffs may have contributed to some price increases, but the cost of some imported goods, such as clothing, fell in May from the previous month, and many services, such as airline fares and hotel rooms, also dropped in price.

On a monthly basis, overall prices ticked up just 0.1% from April to May, down from 0.2% the previous month. Core prices also dropped to 0.1% from 0.2%.

Grocery prices rose 0.3% from April to May, and are up 2.2% in the past year. Fruits and vegetables, breakfast cereals, and frozen foods all rose in price. Egg costs fell 2.7%, their second straight drop, though they are still more than 40% more expensive than a year ago.

Inflation has cooled in the past year and, excluding the impact of tariffs, economists say it would be on track to return to the Fed's target, which would allow the central bank to cut its key interest rates. Yet core prices have been more stubborn and were stuck between 3.2% and 3.4% for nearly a year until February, when they started to decline. They have now been at 2.8% for three straight months.