US Inflation to Tick Higher as Tariffs Reach Consumers

5rk3tv8[wb(osi9ba{g}k[f7_media_dl_1.png National statistics agency, Bloo

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(Bloomberg) —

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US consumers probably saw slightly faster inflation in May, notably for merchandise, as companies gradually pass along higher import duties.

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Prices of goods and services, excluding volatile food and energy costs, rose 0.3% in May, the most in four months, according to a Bloomberg survey of economists. In April, the so-called core consumer price index climbed 0.2%.

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The measure, which is regarded as a better indicator of underlying inflation, is seen accelerating for the first time this year — to 2.9% — on an annual basis, based on the median projection.

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Wednesday’s report, along with producer price data the following day, will offer Federal Reserve officials a final look at inflation and the impact of higher tariffs before they gather for a June 17-18 policy meeting.

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What Bloomberg Economics Says:

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“We expect a soft print for May’s CPI, with deflation in discretionary services more than offsetting firmer goods inflation. As the recent beige book flagged, some firms are passing through tariffs costs. We see partial pass-through in categories like furniture, apparel, and auto parts. But airfares are falling sharply, and hotels and recreational services are downshifting too.”

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—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins, economists. For full analysis, click here

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Despite President Donald Trump’s efforts to jawbone central bankers into quickly lowering interest rates, Fed Chair Jerome Powell and his colleagues have indicated they have time to assess the impact of trade policy on the economy, inflation and job market.

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US central bankers have entered a blackout period ahead of their policy meeting.

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In addition to the inflation data, weekly initial jobless claims data will be scrutinized for signs of stress in the labor market; Thursday’s report showed applications rose in the final week of May to the highest level since October. Nonetheless, Friday’s jobs report indicated employment growth is moderating yet still healthy.

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In Canada, tourism figures for May are likely to show an ongoing steep decline in visits to the US. Manufacturing sales for April are also expected to drop as tariffs hammer exports, and national balance sheet data for the first quarter will reveal how household incomes and wealth fared as Trump ramped up his threats and began rolling out levies.

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Elsewhere, inflation measures from China to Brazil, along with UK and euro zone wage data, may be among the highlights.

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Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

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Asia

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The week in Asia starts with a data blast from China expected to underscore the disinflationary drag that’s dampening manufacturing activity as trade momentum also slows.