LOU WATERS, CNN ANCHOR: A crucial indicator released today may persuade the Federal Reserve to hold off on another interest rate increase later this month. The closely watched Consumer Price Index, a measure of what you pay for every day goods like clothing, food and gasoline, edged up 0.1 of a percent last month. But that single number does not tell the whole story. CNN's Brooks Jackson is in Washington now with more on that -- Brooks.</s>BROOKS JACKSON, CNN CORRESPONDENT: That's right, Lou. The CPI was up only modestly, those figures released just this morning, and that's a sign that inflation is under control.</s>JACKSON (voice-over): The index for all items rose only 0.1 percent, pretty good. Food jumped up half a percent, a surprise. But that was off-set by falling energy prices, down nearly two percent. Taking out those volatile food and energy prices, everything else, the closely watched core rate, inched up just two-tenths of one percent. The cost of fresh vegetables sprouted up 5.8 percent, due partly to higher shipping costs, resulting from previous increases in fuel prices. Airline fares were up eight-tenths of one percent, also pushed by higher fuel costs. Gasoline prices were down 3.5 percent in May. But they've turned up again this month. That will show up when June figures are released a month from now. (on camera): Economist had been concerned that inflation was heating up. But the latest figures indicate the worst may be over, especially when looking at the trend for the last several months. (voice-over): For the last three months, consumer prices have been going up at an annual rate of 3.1 percent; not ideal, but better than the three months previous to that when prices were rising at a 3.9 percent rate.</s>JACKSON: So it is the latest indication that the economy may be cooling off a bit. That is leading more economists to say: Interest rates may now level off, at least for a while -- Lou.</s>WATERS: We'll wait and see about that. Brooks Jackson in Washington.
Benign CPI Latest Indication of Cooling Economy