The prices for eggs, dairy, and fuel have dropped as the U.S. inflation rate cools, falling to less than half of what it was this time last year.
Overall inflation is hovering at just four percent, according to the latest numbers from the Bureau of Labor Statistics (BLS). Year-over-year inflation soared to a 40-year high of 9.1 percent last summer.
The reversal of the inflation rate is a strong signal that interest rate hikes by the Federal Reserve meant to dampen inflation may be working. Reserve officials are set to meet June 14, just a day after the BLS report was published, and could pause additional rate hikes upon the latest inflation data.
Prices for meats, poultry, fish, and eggs decreased 1.2 percent in May, while the index for eggs fell 13.8 percent, which the BLS says is the largest decrease in that index since 1951.
Dairy and related products saw price declines of 1.1 percent, while cereals and bakery products were unchanged.
Compared to the same time last year, energy costs dropped 11.7 percent while gasoline prices declined 19.7 percent. Natural gas prices fell 11 percent and the fuel oil index dropped by 37 percent. Electricity prices rose 5.9 percent over the past year.
While President Joe Biden has previously deflected any responsibility for the skyrocketing inflation that ensued after he came into office, the White House took credit for the falling inflation rate and remained optimistic about the future.
“Today’s report is good news for hard working families. It shows continued progress tackling inflation at the same time that unemployment remains at historic lows,” Biden said in a statement. “Annual inflation is now at the lowest level since March 2021, and less than half of what it was last June. After gas and grocery prices increased rapidly last year due to the war in Ukraine, inflation has fallen for 11 months in a row.”
The White House added, “While there is more work to do, the plan that I laid out a year ago to bring down the cost of living and sustain stable and steady growth is working.”
Following a series of 10 consecutive rate hikes, the Fed is now widely expected to keep rates steady after it concludes its two-day meeting this week.