From Holden:

Overall, the rate of inflation increased a modest 0.2% in May, but the core inflation rate (which ewxcludes energy costs) rose 0.3%, three times the rate of the previous two months. And you know energy prices will not drop for years to come. The market will not like this one bit.

The Labor Department reported that its producer price index, which measures inflation before it reaches the consumer, was up just 0.2% last month, even better than the 0.4% rise many economists had expected. The improvement reflected the fact that energy prices rose just 0.4% after a 4% jump in April, and food prices fell 0.5%.

But the core rate of inflation, which excludes food and energy, was up 0.3% in May, compared with more modest gains of 0.1% in both March and April. That was slightly higher than the 0.2% increase analysts had been expecting.