Inflation tracker: Inflation down in May, except in the United States

In May, the United States stood out for an increase, albeit very slight, in its inflation (from a higher level), while it slowed sharply in the eurozone and fell slightly in the United Kingdom and Japan. Among the unfavourable developments to watch out for, energy commodity prices (oil and gas) have started to rise again since April, as has the break-even inflation rate, which could support inflation over the coming months. Conversely, two positive dynamics are emerging: wage growth is moderating, and price pressures (on the supply side) are easing, with the notable exception of the United States.

In the United States, CPI inflation rose very slightly in May from +2.34% to +2.37% y/y

Although this increase contrasts with the sharp fall in inflation in the eurozone, it was smaller than expected and still bears no visible trace of the rise in tariffs. Core inflation remained stable at 2.8% y/y for the third consecutive month. Wages continue to moderate and household inflation expectations, which had reached exceptionally high levels in April, moderated somewhat in June.

Nevertheless, the price components of the business surveys signal that supply-side pressures are rising again, and are back at their highest level since September 2023. Lastly, the break-even inflation rate has risen slightly since April, perhaps reflecting that financial markets are beginning to worry about the inflationary impact of tariffs.

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