Consumer prices nudge up in May, but inflation remains tame

WASHINGTON -- Consumer prices rose in May for the first time in three months, but the increase was small and inflation over the past year remained tame, the Labor Department said Tuesday.

The consumer price index rose a seasonally adjusted 0.1% last month after dropping 0.4% in April and 0.2% in March. The so-called core inflation figure, which excludes volatile food and energy costs, rose 0.2% in May after a 0.1% rise the previous month.

Over the previous 12 months, prices rose 1.4% on all goods and 1.7% excluding food and energy costs.

Both are below the Federal Reserve’s target of 2% annual inflation.

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“Inflation has faded to only a minor irritant,” said economist Michael Montgomery of IHS Global Insight. He noted that inflation was running about 2% last year.

Gasoline prices were flat last month after dropping sharply the previous two months, but overall energy costs were up because of a 0.8% increase in electricity prices and a 2.4% rise in natural gas prices, the Labor Department said.

Those increases were partly offset by a 0.1% drop in food prices last month. Food prices had increased 0.2% in April.

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