The Consumer Price Index Rises 0.3% In September, Seasonally Adjusted, and Hits 3.0% Annually

by Alex Demolitor | Oct 24, 2025 | Definitions

The September 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation increased by 0.3% for the month, down from 0.4% in August. These data were released at 8:30 am EST on October 24, 2025, by the Bureau of Labor Statistics (BLS). Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 3.0%, up from 2.9% in August.

The results missed economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents September’s figures, while the right column represents forecasters’ expectations. As you can see, the red metrics highlight how inflation was cooler than anticipated.

After cutting interest rates in September, Fed Chairman Jerome Powell noted on Oct. 14 that “Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates. The Committee’s plans lay out a deliberately cautious approach to avoid the kind of money market strains experienced in September 2019.”

In other words, with the Fed still selling bonds and liquidity declining in money markets, commercial banks have tapped their reserves to help with short-term funding. The issues could result in the Fed ending quantitative tightening on Oct. 29, which would be another dovish development.

Apparel was the primary outlier in September, rising by 0.7% MoM. Gasoline prices also rose by 4.1% MoM after increasing by 1.9% in August. Core inflation (which excludes the impacts of food and energy), rose by 0.2% in September, slipping from the 0.3% jumps in July and August.

Food Prices

The food index rose by 0.2% MoM in September following a 0.5% rise in August. Four of the six major grocery store food indexes increased, while one was flat, and the other decreased:

• Cereals and bakery products (+0.7%)
• Meats, poultry, fish, and eggs (+0.3%)
• Dairy and related products (-0.5%)
• Fruits and vegetables (+0.0%)
• Nonalcoholic beverages (+0.7%)
• Other food at home (+0.5%)

Surprisingly, the food away from home index rose by 0.1%, which was its lowest reading in several months and signals a slowdown in restaurant inflation.

Energy Prices

The energy index jumped by 1.5% in September following a 0.7% rise in August. Gasoline prices increased by 4.1%, while electricity and natural gas prices fell by 0.5% and 1.2%, respectively.

Core CPI

The September core CPI rose by 0.2% month-over-month and 3.0% Y-o-Y. Below is an itemized breakdown of the main price fluctuations seen in the core CPI reading:

• Shelter index: (+0.2%) [August: +0.4%]
• Rent index: (+0.2%) [August: +0.3%]
• Owners’ equivalent rent: (+0.1%) [August: +0.4%]
• Motor vehicle insurance: (-0.4%) [August: +0.0%]
• Medical care services: (+0.3%) [August: -0.1%]
• Physician services: (-0.1%) [August: +0.3%]
• Hospital services: (+0.3%) [August: +0.0%]
• Airline fares: (+2.7%) [August: +5.9%]

Seasonally Unadjusted CPI

Before seasonal adjustments, the CPI-U for September 2025 increased by 3.0% Y-o-Y to an index level of 324.800. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results. 

Economic Challenges

While the U.S. government shutdown has paused the release of most public economic data, private sources still indicate a deteriorating outlook.

For example, there has been a recent string of bankruptcies among large subprime auto lenders, as consumers fail to make their loan payments. An Oct. 17 article from The Guardian noted:

“Car owners were found to be missing payments at the highest rate in more than 30 years in January, when a Fitch Ratings index monitoring the share of subprime auto borrowers at least 60 days past due on their loans hit 6.5%.” In addition: “Car repossessions surged to their highest level since 2009 last year, according to Cox, with 1.73m vehicles seized, up 16% from the year prior and 43% from 2022.”

Moreover, the situation is even worse now. And with interest rates still relatively elevated and stress beginning to show in riskier areas of consumer credit, problems in the auto loan market could spread if the economy continues to weaken.

To that point, the Philadelphia Fed released its Manufacturing Business Outlook Survey on Oct. 16. And while sentiment regarding future activity remained positive, “The survey’s index for current general activity fell significantly and turned negative, more than offsetting last month’s increase.”

“The diffusion index for current general activity dropped 36 points to -12.8 in October, its lowest reading since April. Twenty-five percent of the firms reported decreases in general activity this month (up from 17 percent last month), while 12 percent reported increases (down from 40 percent).”

Finally, The Conference Board released its latest Consumer Confidence report on Sep. 30. Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said:

“Consumer confidence weakened in September, declining to the lowest level since April 2025. The present situation component registered its largest drop in a year. Consumers’ assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low.”

Likewise, “there was a rise in mentions of jobs and employment to a level unseen since August 2024. The comments were mostly negative, especially when referring to the current situation; there were a few positive comments which mostly conveyed hopes that things would get better.”

So, while inflation uncertainty has declined somewhat, the second half of the FOMC’s dual mandate — maximum employment — remains challenged, and could dominate if the recent trends persist. Consequently, lower interest rates may be the path of least resistance until the labor market shows more signs of life.

Turning to the financial markets, gold has been on a tear and surpassed $4,000 an ounce. And while volatility has increased, the long-term fundamentals of higher fiscal deficits, inflation, and a weaker U.S. dollar remain in place. Therefore, the theme of global central banks replacing FX reserves with gold should continue for the foreseeable future.

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The Consumer Price Index Rises 0.4% In August, Seasonally Adjusted, and Jumps to 2.9% Annually

by Alex Demolitor | Sep 11, 2025 | Definitions

The August 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation increased by 0.4% for the month, double the 0.2% rise in July. These data were released at 8:30 am EST on September 11, 2025, by the Bureau of Labor Statistics (BLS). Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.9%, up from 2.7% in July.

The results aligned near economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents August’s figures, while the right column represents forecasters’ expectations. As you can see, core came in as expected, while the monthly headline figure outperformed.

While Fed Chairman Jerome Powell hinted at a potential rate cut later this month, the FOMC has been cautious in its approach to monetary policy. Rather than encourage another round of inflation by cutting rates prematurely, the committee has prioritized price stability, and today’s results did little to eliminate the concerns.

Used cars and trucks were the primary outliers, with both rising by 1.0% MoM. Gasoline prices also rose by 1.9% MoM after declining by 2.2% in July. Core inflation (which excludes the impacts of food and energy), rose by 0.3% in August, matching the 0.3% from July, and slightly outperforming the 0.2% in June.

Food Prices

The food index rose by 0.5% MoM in August following a flat reading in July. All six major grocery store food indexes increased:

• Cereals and bakery products (+0.1%)
• Meats, poultry, fish, and eggs (+1.0%)
• Dairy and related products (+0.1%)
• Fruits and vegetables (+1.6%)
• Nonalcoholic beverages (+0.6%)
• Other food at home (+0.1%)

Maintaining its momentum, the food away from home index rose by 0.3%, mirroring July, and slightly underperforming the 0.4% increase in June.

Energy Prices

The energy index jumped by 0.7% in August after declining by 1.1% in July. Gasoline prices increased by 1.9%, electricity by 0.2%, while natural gas dropped by 1.6%.

Core CPI

The August core CPI rose by 0.3% month-over-month and 3.1% Y-o-Y. Below is an itemized breakdown of the main price fluctuations seen in the core CPI reading:

• Shelter index: (+0.4%) [July: +0.2%]
• Rent index: (+0.3%) [July: +0.3%]
• Owners’ equivalent rent: (+0.4%) [July: +0.3%]
• Motor vehicle insurance: (+0.0%) [July: +0.1%]
• Medical care services: (-0.1%) [July: +0.8%]
• Physician services: (+0.3%) [July: +0.2%]
• Hospital services: (+0.0%) [July: +0.5%]
• Airline fares: (+5.9%) [July: +4.0%]

Seasonally Unadjusted CPI

Before seasonal adjustments, the CPI-U for August 2025 increased by 2.9% Y-o-Y to an index level of 323.976. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results. 

Cuts Coming?

While the U.S. labor market has been weakening for some time, conflicting data had the FOMC preaching patience. However, with several sources converging recently and signaling a slowdown, a September rate cut is likely a done deal.

For example, the BLS released its latest U.S. nonfarm payrolls report on Sep. 5. The economy added 22,000 net new jobs (well below expectations), and the report stated:

“The change in total nonfarm payroll employment for June was revised down by 27,000, from +14,000 to -13,000, and the change for July was revised up by 6,000, from +73,000 to +79,000. With these revisions, employment in June and July combined is 21,000 lower than previously reported.”

Thus, while a 21,000 miscount may not seem like much, the key revelation was that June’s revision to -13,000 was the first net negative print since 2021.

To that point, the BLS reported on Sep. 9 that annual revisions showed the U.S. added 911,000 fewer jobs over the last 12 months than previously reported. An excerpt read:

“The preliminary estimate of the Current Employment Statistics (CES) national benchmark revision to total nonfarm employment for March 2025 is -911,000 (-0.6 percent), the U.S. Bureau of Labor Statistics reported today. The annual benchmark revisions over the last 10 years have an absolute average of 0.2 percent of total nonfarm employment.”

Finally, The Conference Board revealed on Aug. 26 that Americans’ assessment of the labor market continued to deteriorate. Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said, “Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months. The present situation and the expectation components both weakened. Notably, consumers’ appraisal of current job availability declined for the eighth consecutive month.”

More importantly, The Conference Board’s ‘labor differential’ metric soared to a new cycle high.

To explain, the gray line above tracks the U.S. unemployment rate, while the red line above tracks the labor differential. When the red line rises, it means that more survey respondents believe that jobs are “hard to get” versus “plentiful.”

Furthermore, with a rising red line often a precursor to a higher unemployment rate, the sharp spike on the right side of the chart should be a cause for concern for the FOMC.

All in all, while inflation uncertainty remains high, the second half of the FOMC’s dual mandate — maximum employment — remains challenged. Therefore, a continuation of the trend should result in more rate cuts in the months ahead.

As the drama unfolds, gold is the clear winner. The yellow metal hit another record high in September, and Goldman Sachs expects more upside in the months and years ahead.

To explain, the blue line above tracks the consolidated gold holdings of global central banks, while the red dashed line above tracks Goldman Sachs’ projection over the next several months.

As you can see, continued demand from the largest buyers should help keep the gold price elevated for the foreseeable future.

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The Consumer Price Index Rises 0.2% In July, Seasonally Adjusted, and Holds at 2.7% Annually

by Alex Demolitor | Aug 12, 2025 | Definitions

The July 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation increased by 0.2% for the month, slightly below the 0.3% rise in June. These data were released at 8:30 am EST on August 12, 2025, by the Bureau of Labor Statistics. Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.7%, matching the figure from June.

The mixed results aligned near economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents July’s figures, while the right column represents forecasters’ expectations. As you can see, core inflation outperformed, while headline inflation underperformed.

After the latest FOMC meeting on Jul. 30, Chairman Jerome Powell said during his press conference:

“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen. A reasonable base case is that the effects on inflation could be short-lived, reflecting a one-time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed.”

Thus, with today’s inflation results doing little to alleviate those concerns, more data will likely be needed before the FOMC feels comfortable cutting rates.

Transportation and medical care services were noticeable outliers in July, with each rising by 0.8% MoM, while fuel oil jumped by 1.8% MoM despite overall energy prices declining by 1.1% MoM. Core inflation (which excludes the impacts of food and energy), rose by 0.3% in July, up from 0.2% in June and 0.1% in May.

Food Prices

The food index was flat in July after rising by 0.3% MoM in June and May. Two of the six major grocery store food indexes increased, one was flat, and the other three realized deflation:

• Cereals and bakery products (-0.2%)
• Meats, poultry, fish, and eggs (+0.2%)
• Dairy and related products (+0.7%)
• Fruits and vegetables (+0.0%)
• Nonalcoholic beverages (-0.5%)
• Other food at home (-0.5%)

Maintaining its momentum, the food away from home index rose by 0.3%, as restaurant prices continue to outperform grocery store products.

Energy Prices

The energy index decreased by 1.1% in July after rising by 0.9% in June. Gasoline prices fell by 2.2%, natural gas by 0.9%, and electricity by 0.1%.

Core CPI

The July core CPI rose by 0.3% month-over-month and 3.1% Y-o-Y. Below is an itemized breakdown of the main price fluctuations seen in the core CPI reading:

• Shelter index: (+0.2%) [June: +0.2%]
• Rent index: (+0.3%) [June: +0.2%]
• Owners’ equivalent rent: (+0.3%) [June: +0.3%]
• Motor vehicle insurance: (+0.1%) [June: +0.1%]
• Medical care services: (+0.8%) [June: +0.6%]
• Physician services: (+0.2%) [June: +0.2%]
• Hospital services: (+0.5%) [June: +0.7%]
• Airline fares: (+4.0%) [June: -0.1%]

Seasonally Unadjusted CPI

Before seasonal adjustments, the CPI-U for July 2025 increased by 2.7% Y-o-Y to an index level of 323.048. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results. 

Tough Job Ahead?

The on-again, off-again, relationship with rate cuts continues to play out, as surprising labor market revisions confirmed the lingering weakness present in private data sources.

For example, U.S. job openings have declined, and ADP recently reported a net loss in its monthly private payrolls. However, the data was largely ignored because U.S. nonfarm payrolls — sourced from the Bureau of Labor Statistics (BLS) — continued to show solid growth and healthy hiring. But, that all changed on Aug. 1. The report stated:

“Revisions for May and June were larger than normal. The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised down by 133,000, from +147,000 to +14,000. With these revisions, employment in May and June combined is 258,000 lower than previously reported.”

Thus, while the unemployment rate held steady near 4.2%, the blue bars furthest to the right of the second chart below show how the pace of employment growth has declined significantly over the last few months.

Moreover, the massive downward revisions further complicate the FOMC’s already tough balancing act between taming inflation and maintaining maximum employment.

To that point, Indeed noted on Aug. 1 that the composition of hiring in July was equally troubling. An excerpt read:

“The sectoral breakdown from the jobs report is especially striking, with private education and health services adding 79,000 jobs, while other sectors, including professional and business services, manufacturing, and government, lost more than 10,000 jobs each. While the healthcare and social assistance sub-sector accounts for just 14.6% of total jobs in the economy, 48.8% of all employment growth in the US has occurred in this sub-sector over the past year….

“The increasing concentration of jobs in certain sectors and an outright contraction of jobs in many others does not bode well for the market going forward.”

So, while the FOMC’s latest Summary of Economic Projections has market participants expecting two rate cuts before the end of 2025, Vice Chair of Supervision, Michelle Bowman, advocated for three interest rate reductions on Aug. 9 to act as a hedge “against the risk of a further erosion in labor market conditions and a further weakening in economic activity.” Yet, other committee members prefer a wait-and-see approach, and there is plenty of division among the group.

All in all, there is so much volatility in the data that one month’s sunshine becomes next month’s storm. And with tariff uncertainty still lingering, FOMC members may struggle to form a clear consensus in the months ahead.

In contrast, the economic tension is bullish for gold, with the yellow metal hitting a new record high in August — surpassing $3,500 — and the long-term momentum remains intact.

To explain, Goldman Sachs still expects gold to hit $4,000 by mid-2026. The investment bank’s latest analysis (the dashed red line) is well ahead of what’s priced into the futures market (the dashed gray line), which means there’s still room for traders to shift their expectations upwards.

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The Consumer Price Index Rises 0.3% In June, Seasonally Adjusted, and Up 2.7% Annually

by Alex Demolitor | Jul 15, 2025 | Definitions

The June 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation rose by 0.3% for the month, up from 0.2% in May. These data were released at 8:30 am EST on July 15, 2025, by the Bureau of Labor Statistics. Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.7%, a jump from 2.4% Y-o-Y in May.

The mixed results aligned near economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents June’s figures, while the right column represents forecasters’ expectations. As you can see, core was cool, while the headline figure was somewhat hot.

Despite that, fresh tariff threats could increase the FOMC’s inflation concerns. Chairman Jerome Powell said recently that resurgent inflation “is a risk. As the people who are supposed to keep stable prices, we need to manage that risk. That’s all we’re doing…. It is just something you want to approach carefully. If we make a mistake people will pay the cost for a long time.”

Thus, today’s data may not have done enough to alleviate those concerns.

Electricity, gasoline, and fuel oil led the headline increase, as the metrics rose by 1% or more MoM . Core inflation (which excludes the impacts of food and energy), rose by 0.2% in June, up from 0.1% in May.

Food Prices

The food index jumped by 0.3% MoM in June, matching May, and three of the six major grocery store food indexes realized deflation once again:

• Cereals and bakery products (-0.2%)
• Meats, poultry, fish, and eggs (-0.1%)
• Dairy and related products (-0.3%)
• Fruits and vegetables (+0.9%)
• Nonalcoholic beverages (+1.4%)
• Other food at home (+0.2%)

Maintaining its momentum, the food away from home index rose by 0.4%, as restaurant inflation accelerated in June.

Energy Prices

The energy index increased by 0.9% in June after falling by 1.0% in May. Gasoline prices rose by 1.0%, natural gas by 0.5%, and electricity by 1.0%.

Core CPI

The June core CPI rose by 0.2% month-over-month and 2.9% Y-o-Y. Below is an itemized breakdown of the main price fluctuations seen in the core CPI reading:

• Shelter index: (+0.2%) [May: +0.3%]
• Rent index: (+0.2%) [May: +0.2%]
• Owners’ equivalent rent: (+0.3%) [May: +0.3%]
• Motor vehicle insurance: (+0.1%) [May: +0.7%]
• Medical care services: (+0.6%) [May: +0.2%]
• Physician services: (+0.2%) [May: -0.3%]
• Hospital services: (+0.7%) [May: +0.4%]
• Airline fares: (-0.1%) [May: -2.7%]

Seasonally Unadjusted CPI

Before seasonal adjustments, the CPI-U for June 2025 increased by 2.7% Y-o-Y to an index level of 322.561. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results. 

Trump’s Tariff Threats

After a three-month tariff reprieve, U.S. President Donald Trump ignited trade war fears again by threatening new levies on Canada, Mexico, Brazil, and the EU. And while most of the dues don’t come into effect until Aug. 1, and he could announce another pause when the deadline arrives, the uncertainty is another headache for the FOMC.

With the committee largely adopting a wait-and-see approach to interest rate cuts, the longer the uncertainty lingers, the more time and data they need to assess the situation. Consequently, while inflation remains above their 2% target and the labor market looks solid on the surface, the tariff diversion could distract from the underlying warning signs.

For example, U.S. nonfarm payrolls came in at 147,000 on Jul. 3, and the unemployment rate declined from 4.2% to 4.1%. However, ADP reported on Jul. 2 that private employers cut 33,000 jobs in June, which was a rare negative print from the payrolls provider. So, while government job gains helped bolster the former, the corporate sector could be signaling that tariff uncertainty is hurting business prospects.

To explain, the blue line above tracks the monthly change in the private component of U.S. nonfarm payrolls, while the white line above tracks the monthly change in ADP’s figures. If you analyze the connection, you can see the pair often moves in a similar direction.

More importantly, the gap on the right side of the chart shows how negative ADP payrolls (the white line) contrast the strength of the NFP number (the blue line). As such, the U.S. labor market may be weaker than it appears.

To that point, the NFIB released its latest Small Business Optimism Index on Jul. 8. The report noted that 10% of respondents cited poor sales as their single most important problem, the highest reading since March 2021.

To explain, the second-darkest line on the chart above tracks the poor sales component. If you analyze the right side of the chart, you can see that it continues to trend higher and is unlikely to reverse until the macroeconomic clouds clear. Furthermore, if a sales slump continues to plague U.S. small businesses, they may respond by reducing headcount and further weakening the labor market.

All in all, while tariffs will likely exacerbate the growth and employment slowdown, the economic turmoil is bullish for gold. The yellow metal remains in an uptrend and concerns about the U.S. dollar and its safe-haven status have investors and central banks allocating more capital toward gold.

To explain, the gray line above tracks the share of U.S. dollar reserves held by global central banks, while the red line above tracks the share of gold reserves held by global central banks. If you analyze the post-COVID shift, you can see that U.S. debt and spending concerns caused global institutions to reduce their USD exposure and increase their gold assets. And with the trend poised to continue, flows and fundamentals should keep gold elevated for the foreseeable future.

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The Consumer Price Index Rises 0.1% In May, Seasonally Adjusted, and Up 2.4% Annually

by Alex Demolitor | Jun 11, 2025 | Definitions

The May 2025 Consumer Price Index of All Urban Consumers (CPI-U) report indicates that inflation rose by 0.1% for the month, down from April’s 0.2% increase. These data were released at 8:30 am EST on Tuesday, June 11, 2025, by the Bureau of Labor Statistics. Before seasonal adjustment, the year-over-year (Y-o-Y) inflation rate in the all-items index grew by 2.4%, a small rise from the 2.3% Y-o-Y in April.

The downside surprise was more welcome news, as the results missed economists’ consensus estimates. The table below is courtesy of Investing.com. The left column represents May’s figures, while the right column represents forecasters’ expectations. As you can see, tariffs have not been as inflationary as anticipated.

Despite the deceleration, the FOMC has been increasingly concerned about inflation. The May meeting Minutes (released on May 28) stated:

“The substantial upward revision to the inflation forecast in 2025 was judged to leave the risks around the inflation projection balanced in that year. Thereafter, the staff continued to view the risks around the inflation forecast as skewed to the upside, with recent increases in some measures of inflation expectations raising the possibility that inflation would prove to be more persistent than the baseline projection assumed.”

As a result, with the FOMC somewhat offside in its projection, a weaker CPI could surprise market participants in the months ahead.

Gasoline, used cars and trucks, and apparel led May’s downside momentum, while shelter held steady at 0.3% MoM. Core inflation (which excludes the impacts of food and energy), rose by 0.1% in May, declining from the 0.2% rise in April.

Food Prices

The food index jumped by 0.3% MoM in May, after falling by 0.1% in April, and three of the six major grocery store food indexes realized deflation:

• Cereals and bakery products (+1.1%)
• Meats, poultry, fish, and eggs (-0.4%)
• Dairy and related products (-0.1%)
• Fruits and vegetables (+0.3%)
• Nonalcoholic beverages (-0.3%)
• Other food at home (+0.7%)

Maintaining its momentum, the food away from home index rose by 0.3%, as restaurant inflation stayed resilient.

Energy Prices

The energy index dropped by 1.0% in May, a noticeable turn from the 0.7% increase in April. Gasoline prices fell by 2.6%, while natural gas deflated by 1%, and electricity jumped by 0.9%.

Core CPI

The May core CPI rose by 0.1% month-over-month and 2.8% Y-o-Y. Below is an itemized breakdown of the main price fluctuations seen in the core CPI reading:

• Shelter index: (+0.3%) [April: +0.3%]
• Rent index: (+0.2%) [April: +0.2%]
• Owners’ equivalent rent: (+0.3%) [April: +0.4%]
• Motor vehicle insurance: (+0.7%) [April: +0.6%]
• Medical care services: (+0.2%) [April: +0.5%]
• Physician services: (-0.3%) [April: +0.3%]
• Hospital services: (+0.4%) [April: +0.6%]
• Airline fares: (-2.7%) [April: -2.8%]

Seasonally Unadjusted CPI

Before seasonal adjustments, the CPI-U for May 2025 increased by 2.4% Y-o-Y to an index level of 321.465. Since these figures are unadjusted, they include regular seasonal price fluctuations that can create volatility in the results. 

Juggling the Dual Mandate 

While inflation has been the primary driver of the FOMC’s caution, it’s important to remember that maximum employment is the second half of the committee’s dual mandate. And with mixed data hitting the wire recently, slower job growth could support rate cuts in the months ahead. 

On the positive side, U.S. nonfarm payrolls outperformed expectations on Jun. 6, as the economy added 139,000 new jobs in May, and the unemployment rate held firm at 4.2%. However, the report stated:

“The change in total nonfarm payroll employment for March was revised down by 65,000, from +185,000 to +120,000, and the change for April was revised down by 30,000, from +177,000 to +147,000. With these revisions, employment in March and April combined is 95,000 lower than previously reported.”

As a result, prior months were weaker than they appeared, and another downward revision could occur next month. Moreover, the unemployment rate continues to creep higher off of its 2023 low.

As further evidence, ADP’s private payrolls missed expectations on Jun. 4. The report stated, “The pace of hiring in May reached its lowest level since March 2023.” Furthermore, firms of all sizes reduced their headcounts in May, with the only positive contribution of 51,000 additions coming from firms with 50-249 employees. Conversely, layoffs were driven by small establishments.

Finally, the NFIB released its small business employment report on May 31. The release stated: “A seasonally adjusted net 12 percent of owners plan to create new jobs in the next three months, down 1 point from April. Job creation plans remain in weak territory compared to recent history.”

Furthermore, “Seasonally adjusted, a net 26 percent reported raising compensation, down 7 points from April and the lowest reading since February 2021. This was the greatest monthly decline since April 2020. A net 20 percent (seasonally adjusted) plan to raise compensation in the next three months, up 3 points from April. Clearly, the pressure of labor costs on inflation is easing.”

Thus, with hiring intentions and expected wage increases both heading in negative directions, a weaker U.S. labor market could prompt the Fed to ease monetary policy during the summer months. If so, the dovish recalibration could push gold to another record high. The yellow metal has been one of the best-performing assets in 2025, and ETF flows could be the next bullish catalyst.

To explain, the Deutsche Bank chart above shows how after four negative years, gold ETF flows turned positive in 2025. However, the blue bar furthest to the right is relatively small, and prior periods saw much larger inflows that were sustained for several years.

As such, a repeat of recent history could support a gold bull market that lasts into 2026 and beyond.

Are you thinking about diversifying into precious metals? Talk to your financial advisor about initiating a gold IRA account today, allowing you to invest in this red-hot asset on a tax-advantaged basis. Additionally, our complimentary CPI inflation calculator remains at your disposal, enabling you to assess inflation’s impact on your finances. Please seek the guidance of a financial advisor before making any investment decision.

In addition, if credit concerns have increased alongside the economic uncertainty, you’re not alone. New Era Debt Solutions is a top-rated debt settlement company that can help alleviate unsecured claims in as little as 24 to 48 months. Similarly, Family Credit Management is an excellent nonprofit credit counseling agency that provides the education and resources necessary to determine the optimal path to financial well-being.

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