The consensus among economists polled by Refinitiv is that prices rose by 4.1% last month compared to a year ago. If those predictions are correct, that would mark a significant decline from April, when annual inflation was 4.9%. It would also mean that inflation is about half what it was a year ago. The slowdown in inflation occurred in conjunction with the Federal Reserve’s rate-hiking campaign, which began in March 2022.
When it reopened, consumers jumped at the opportunity to finally enjoy services and experiences like dining out, traveling and getting their hair styled. Firms scrambled to hire more workers and, as a result, had to raise wages. That helped fuel more inflation since it meant workers had more money to spend. “Wage growth is still a big problem,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said recently.