US inflation eases slightly as economic anxiety looms over presidential election

Inflation eased slightly in the US last month, as consumers’ frustration over high prices continues to loom over November’s presidential election.

The consumer price index rose at annual pace of 3.3% in May, slipping back from the previous month’s reading of 3.4% on the year.

On a month-to-month basis, prices were flat.

Price growth has fallen dramatically since surging above 9% two years ago, to its highest level in a generation, during the economic fallout of the Covid-19 pandemic.

But with many Americans still feeling the pinch, the consumer price index has yet to fall as far as policymakers want.

The latest official data was released hours before the Federal Reserve, which raised interest rates sharply in 2022 and 2023 in a bid to cool the US economy, will announce its latest decision.

The central bank is widely expected to main rates between 5.25% and 5.5%, a two-decade high. It will also publish a closely-scrutinized summary of top officials’ expectations for growth, jobs and inflation.

Anxiety over the state of the economy looms large. Nearly three in five Americans wrongly believe the US is in recession, according to a Harris poll conducted exclusively for the Guardian last month.

Unemployment is nearing 50-year lows, and Wall Street has risen sharply since the fall. But as Joe Biden seeks re-election to the White House, surveys indicate he is struggling to reassure voters that the economy has strengthened on his watch.