May showed only a slight increase in consumer good prices

The economy is still waiting for the other shoe to drop on tariff impacts.

The Consumer Price Index report for May showed that prices increased less than economists expected. They’d predicted a 0.2% jump, but prices only increased 0.1% last month.

Inflation has risen slower than some economists predicted. Compared to last year, prices rose 2.4% in May, a slight gain from April’s 2.3% annual gain.

Slowing price hikes could simply mean that companies are delaying inevitable price increases once stockpiles run out. Many businesses proactively increased inventory pre-“Liberation Day” to avoid tariffs, but those stockpiles could start running out soon. Many reciprocal tariffs were paused in April and May, but last Wednesday, President Trump announced a deal that locks in a 55% tax on Chinese goods. Some companies ran pre-tariff sales that could also have contributed to decreased prices.

Cars saw a large decline in sales after the tariff-induced panic buying of Q1. New car prices fell 0.3% in May, and used cars cost 0.5% less. Apparel prices, also considered to be susceptible to tariffs, fell 0.4% last month. The 2.7% drop in airfare prices also helped slow inflation, as a recession-wary public appeared to pull back on travel.

However, the egg jokes will continue. Food prices, which had let up last month, rose 0.3%. And while egg prices themselves actually dropped 2.7%, they were still 41.5% higher than a year ago.

While the economy has been surprisingly resilient to the tariff threats and uncertainty over the first half of 2025, there are still more economic eggs left to hatch.