Official data showed U.S. consumer price growth eased significantly last month ahead of a crucial meeting at which policymakers will announce their latest interest rate decision. The U.S. Labor Department says prices rose 3.3% year over year through the end of May, while they fell 0.1 percentage point from the previous month. Even as rent continues to strain household budgets, core inflation, which strips out more volatile items such as food and energy prices, has also fallen.

The Federal Reserve is not expected to cut interest rates this month, even as borrowing costs hit their highest levels in years. While the inflation rate is still above the U.S. central bank's 2% target, it was lower than some analysts had forecast, indicating they now believe a rate cut this year is more likely. Although food inflation has remained at around 2%, Americans are nonetheless feeling the strain of rising rents and utility costs. Inflation rates for other goods and services in the United States have varied.

While used car inflation fell by more than a tenth, the rate of rise in prices for transport, such as taxi rides, increased by more than a tenth from January to May. According to investment strategist Lindsey James of Quilter Investors, markets are "still in a holding pattern" despite falling inflation. "We expect either inflation to fall faster to the 2% target, or the economy will not be able to withstand the strain and require a new round stimulation." The rate at which prices rise or fall over a period of time is called the inflation rate.

The Consumer Price Index is used by the US Bureau of Labor Statistics to calculate inflation. This includes checking the prices of more than 80,000 consumer goods and obtaining data from 23,000 firms. In an effort to attract consumers, several large U.S. stores such as Target cut prices on items such as groceries and baby products, although average price increases remained stable. The cost of milk at the grocery store fell 1.3%, and spending on other soft drinks also fell. The cost of fruits and vegetables has not changed. Health care costs rose 0.5% and rents jumped 0.4%, matching April's rise. Prescription drug prices rose 2.1% and hospital costs increased 0.5%. US economic performance is especially important ahead of the November 5 presidential election.

US President Joe Biden's reputation is reportedly being affected by inflation statistics as Americans continue to struggle financially.