Higher food away from home prices are expected to erase most of the slowdown in grocery prices, economists said.and people’s penchant to eat out. As a result, the overall food category encompassing both groceries and restaurant foods will only dip by 0.1% month over month in May, they said.
Meanwhile, core CPI will be lifted again by higher used car prices, economists said. Goldman Sachs forecasts a 3% jump in used car prices in May from April but expects price increases to ease in coming months.are expected to increase 0.5% month over month, but that’s slower than the 0.7% increases seen as recently as February, noted Moody’s Analytics economist Dante DeAntonio.
With summer approaching, Goldman Sachs also expects hotel prices to jump 2% in May and recreation to rise 0.4%, reflecting high wage growth over the last year and anticipation of solid consumer demand.Headline CPI will be held down by lower energy prices, economists said. Bank of America economists forecast a hefty 3% monthly decline in energy prices as gas prices declined in May. AAA data show average regular gasoline prices declined 2.1% month over month.
Adobe Analytics said on Tuesday its monthly online inflation survey grocery price increases slowed for the eighth consecutive month. In May, online grocery prices rose 0.3% monthly, or 8.2% annually. “Consumers are increasingly buying more of their groceries online, and this category has generally moved in lock step with the Consumer Price Index,” it said.Futures tied to the broad stock market gauge, the S&P 500 index, were up 0.09% at 4,346.
“Over the short term, the core measure may give a more accurate reading of where inflation is headed, but people do buy food, fill up their