After a second straight monthly decline, prices are up just 2% in the past 12 months. That's about as low as the Federal Reserve can tolerate before it starts to fear an even worse economic troublemaker: deflation.
The Consumer Price Index fell 0.2% in May, its second consecutive decline, as energy costs, particularly the cost of gasoline fell, the U.S. Bureau of Labor Statistics reported Thursday.
Consumer prices dip in April while core inflation posts smallest 12-month gain in 44 years.
More than a year into the record fiscal stimulus spending package, and there's little sign of inflation -- so far. With March's figure in, consumer prices in the past year are up 2.3% and the core rate is a slim 1.1% higher.