Well whaddayaknow, inflation in the US ran meaningfully cooler than expected last month, according to closely-scrutinized data released by the BLS on Wednesday.

Economists’ efforts to forecast price growth are frustrated in 2025 by the impossibility of determining when and where tariff effects will show up. Plainly, goods are affected more than services, but stockpiling ahead of the trade levies helped forestall the pass-through effect, and many of Donald Trump’s more punitive duties are “paused,” tied up in court or both.

Complicating matters further, BLS staff shortages tied to Trump’s federal hiring freeze (and attrition born of ill-will towards Elon Musk’s DOGE effort) threaten to undermine the data collection effort, opening the door to more volatility and putting more of the onus for tallying the aggregates on statistical extrapolation.

With all of that in mind, core CPI rose just 0.13% MoM in May, undershooting consensus by half. Economists expected an acceleration to 0.3%.

On a YoY basis, underlying inflation rose 2.8% from the same month a year ago, unchanged from the prior two months’ annual pace. Economists expected an uptick.

The headline gauge rose a mere 0.081% in May from April, and 2.4% from May of 2024. The shelter gauge rose 0.3% from a month earlier, as did all three food gauges. But a 2.6% drop on the gasoline index helped mute the all-items print.

Feared tariff-related increases on measures for cars and apparel didn’t materialize. In fact, both auto gauges (new and used) posted MoM declines, as did the clothes index. The transportation services measure also showed a decline. Airfares fell 2.7%.

On a first read — and I’m not sure there’s much to be gleaned from a second — it was hard to find something to dislike in Wednesday’s update. It looked like good news, and that’s almost surely how markets will be inclined to trade it.

Note that the CPI-derived “supercore” measure — core services stripping out the rent and OER measures — rose just 0.06% MoM. The three-month rolling, seasonally-adjusted annual rate for “regular” core CPI is now just 1.7%.

Here’s the caveat: The impact of the tariffs is expected to show up on a lag, with the June figures being the first to reflect a survey period during which businesses have largely run through inventory stockpiles.

Still, Wednesday’s data counted as a win for The White House and I’d expect Trump to say as much if he can find time between insisting on the merits of sending the US military into Los Angeles.

If Trump was adamant about the Fed cutting rates before the CPI update (and Lord knows he was), he’ll be even more so now. Suffice to say Fed Chair Bessent would cut.