U.S. consumer prices rose marginally in May, keeping the 12-month inflation well under the U.S. Federal Reserve's target rate of 2 percent or lower.
Prices rose 0.1 percent in May with an uptick in energy prices, which gained 0.4 percent, offset by lower food prices, which fell 0.1 percent.
Economists had expected prices to rise 0.2 percent month to month, but the report was not completely unexpected, as the consensus forecast was correct in predicting an annual inflation rate of 1.4 percent.
Policy makers at the Fed began a two-day meeting Tuesday and are widely expected to discuss when to initiate a rollback of an $85 billion per month asset purchasing program. Inflation under the under the 2 percent threshold deflates the argument that the Fed's accommodation monetary policy is fueling inflation.
The Fed also tracks core prices, a measure of prices excluding food an energy items, which can be volatile on a month-to-month.basis.
In May, core prices rose 0.2 percent from April and 1.7 percent on an unadjusted 12-month basis. This was in line with expectations and is also under the 2 percent threshold.
Rising core prices are an indication that higher prices for energy are spreading to consumer goods. If that is the case, the influence of higher energy prices was mild in May.