Gas prices fall as rent, some food costs increase, latest CPI report shows

Today, investors have their eyes on the Federal Reserve ahead of the central bank's key interest rate decision later today. the Fed is expected to hold rates steady once again. Rates have remained the same since the Fed's meeting last July. Economists are not expecting a rate cut until probably September at the earliest. New data released by the Bureau of Labour Statistics this morning shows what you see right there. Inflation really unchanged in May, but it is up 3.3% from about a year ago. CBS News senior business and technology correspondent Jolene Kent joins us now following this from our Washington Bureau this morning. You don't. You do get around what you heard in New Yorker mornings. Now you're in DC. It's a big day. So let's get into it. CPI data is better than economist expected, but if you look at sectors like food and shelter, there's those those were up. So what's the disconnect about where inflation stands and how folks are feeling it? Well, yeah, let's take a look at actually where the data fell in terms of where prices were in May. If you take a look, we did see a decline in the rate of increase for gasoline. So that was good news. But then that was completely offset by the fact that rents continue to grow at a pretty healthy pace. And that's something that the the CPI report specifically pointed out. We also wanted to look at auto insurance and a lot of your monthly cost. Auto insurance continues to be up 20%. Food was up 2%, but that's actually slowing down in terms of the pace of inflation. Restaurants also increased by 4%, but it's a slowing rate of increase. But when we look at things like groceries, food at home, that actually remained unchanged. So that was good news. But overall, people are feeling perhaps pessimistic about the economy. Certainly consumer confidence, the way people feel about their savings has been in a pretty rough position right now. And that is because inflation of course, is compounded over time. But we wanted to take a look and see at where inflation is since before the pandemic, right? Because people are, a lot of people are saying, look, prices are up so much, when are they kind of come back down or when is it going to abate a little bit? If you look at data since the pandemic from Fred, you can see that inflation is up 20%, but then wages actually have gone up 22.3%. So wages have outpaced the pace of inflation by just a bit, guys. All right. Well, Jilling, sometimes there are surprises. We don't expect any surprises this time. And when we get interest rates that are expected to hold steady and then are steady, we all start to look into the words that we hear from Fed Chair Powell in his speech later this afternoon. What are you looking for in his words? Yeah, We're actually going to head down to the Federal Reserve real soon here, and we will be in the press conference and asking a Chair Powell a question. And the idea here it really is to look at the economic forecast going forward. You're right, we don't expect any rate cut or any rate movement today, probably not one in July. There's still maybe 1/2 and half chance we're going to get a rate cut in September before the election. But what we're going to get is that summary of economic projections and we'll take a look at what's called the dot plot. And I know that's a little bit in the weeds here, a little nerdy, but we'll see if they are projecting 2 cuts for the of the year, maybe one, depending on which big banks you ask, The prediction is between 1:00 and 3:00 interest rate cuts for the rest of the year. But certainly this CPI number, this inflation number today is encouraging. 3.3% is better than what the market was looking for, what economists were expecting. But it's one month after really sticky and stubborn inflation over the past several months. So in terms of what you can expect if you're trying to get into the housing market, are you trying to finance some remodeling? Not much is going to change in the next few months. So this summer is probably more of a holding pattern. But what I'll be looking for from Chair Powell is how he's feeling about the economy as we head into the election and what we can expect in terms of any interest rate movement going into August and September. None of that was too nerdy for us. We love nerdy. We love a good day for you. Thanks for joining us. We appreciate it. Great to see you guys.