May Inflation Forecast: A Modest Uptick Expected

In May 2025, markets are predicting a slight increase in both headline and core inflation. Consensus projections predict monthly CPI will be +0.2%, with core CPP moving up from +0.3% in April.[Note 1]. Headline CPI is expected to rise from +2.3% this year to +2.5 percent, and core CIP is poised to go beyond 0.2 percent, the closest it has been to three months' worth of growth.

However, alternative forecasts are somewhat more variable, with some economists projecting a consistent +0.2% month-over-month increase for headline and core CPI, while others predict slightly lower numbers. The Cleveland Fed's nowcast presents an alternative forecast, which shows a +0.13% month-over-2m CPI and minuscule (0.23%) core CDP, with annual rates of positive 2.45% and negative 0.4%. These diverse projections highlight the question of precise May inflation figures.'

The May CPI report will be closely monitored for several key themes, including the inflationary effects of recent tariffs. Economists will be interested in detecting indications of price increases, particularly in core goods, to determine whether tariffs are being transferred to consumers.