May’s CPI print shaped up largely as expected, with headline inflation of 1.7% tracking in-line with expectations thanks to continued weakness in energy prices.

While energy costs were the primary driver, inflation across the main buckets (food, shelter, transportation) continued to moderate.

Inflation in shelter costs have slowed down in particular - from 4.5% in January to 3% in May - as growth in servicing costs (rent/mortgage) continues to fall…

… alongside weakness in home fuel costs.

Those fuel costs drove the second straight month of transportation deflation, with gasoline down more than 15% Y/Y and air travel down more than 10%…

… while food inflation of 3.4% remains elevated, with broad-based price growth across the basket.