Economists anticipate poor CPI index ahead of economic pressures

Economists, as well as investors, have placed their bets on the May CPI report - most of which have been negative.

According to FactSet's consensus estimates, inflation is expected to rise by 0.2% in the month of May, pushing the inflation rate (annual) to 2.5%, up from the 2.3% set from April. Similarly, Bloomberg has predicted a roughly 0.2% rise in headline CPI, and a 0.3% rise in core CPI (excluding the volatile food and gas prices) bringing the annual rating to 2.9%.

Economists and investors made these predictions all across the board for one key reason: economic pressures. It is evident that the current state of the economy is being pinned by a variety of factors that could affect the price of products. The waging of tariffs, which has continued from April into May, has had yet to stop due to trade negotiations not producing meaningful bilateral agreements. Especially the U.S.-China trade war, which is expected to play the greatest toll on the American economy, ramped up in May after President Trump blamed China for violating trade agreements, and China threatening to keep their retaliatory tariff rate.

In addition, the newfound trend of federal job freezes has only justified further deterioration of future prospects of the economy. With the federal workforce having been cut by 26,000 total jobs, and other layoffs occurring across the private sector, it is clear that inflation has a role in shaping the economy of our time.

Wells Fargo economists wrote in a combined letter, "May’s CPI report will be an important test of the speed and magnitude to which higher tariff rates are being passed along to the consumer..." This accurately summarizes the stakes of the next CPI - as it will determine how much of an impact tariffs will have on regular people, whether its through prices or job growth.