Consumer price index for May eased to 4.0% in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported Tuesday. 

The inflation rate dropped to the slowest pace since March 2021, but prices are still rising at a faster pace than preferred by the Federal Reserve. 

On a monthly basis prices rose 0.1% in May, slower than 0.4% rise in April. 

Core inflation, which excludes food and energy, declined to 5.3%, the slowest pace since November 2021. 

The shelter index increased 8.0% over the last year, accounting for over 60% of the total increase in all items less food and energy. 

Other indexes with notable increases over the last year include motor vehicle insurance up 17.1%, recreation 4.5%, household furnishings and operations 4.2%, and new vehicles 4.7%. 

On a monthly basis, the index for all items less food and energy or core inflation, rose 0.4% in May, as it did in April and March. 

The shelter index increased 0.6% over the month after rising 0.4% in April and the index for rent rose 0.5% in May, as did the index for owners' equivalent rent.

On a monthly basis, food prices rose 0.2%, energy prices declined 3.6% and gasoline prices plunged 5.6%. 

New car prices decreased 0.1% but used cars and trucks prices rose 4.4%. 

Elevated home and rental prices were main drivers of inflation and shelter cost increased 0.6% from the previous month in May.