As consumer price growth continued its slowdown in May, some are asking whether it could mean the American economy is on the rebound. 

The Bureau of Labor Statistics reported Tuesday that the inflation rate fell to 4%, the lowest level it has reached since March 2021 when the inflationary spike began. That news comes as unemployment has remained relatively flat for months and gas prices sit at just under $3.60 per gallon nationally, according to AAA. 

While the news is encouraging and it’s a far cry from June of last year, when inflation climbed above 9% and a gallon of gas cost more than $5, economists say the current situation still signals a mixed bag for the U.S. economy.

“It’s not as bad as it seemed before, and it’s not as normal as it seems now,” said Jason Furman, an economist at Harvard University who chaired the Council of Economic Advisers during the Obama administration. 

Furman and other economists said the headline inflation has come down dramatically, which is good news. But if food and energy costs — which are particularly volatile and known to fluctuate — are removed from the data, they noted the inflation rate on a monthly basis remained stubborn, rising by 0.4% or more, the same as it did the month before. 

Moody’s Analytics economist Bernard Yaros said used automobile prices are the key item holding that rate in place, as they increased 4.4% for the second month in a row. In the good news bracket: Costs for shelter, new vehicles, airfares, jet fuel prices and rental cars all declined, landing between 0.1% and 3%.  

But Yaros said most Americans don’t note the nuances of these shrinking inflation rates because it does not clearly affect their pocketbooks. Instead, they look at the totality of their costs, whether they’re shopping at the grocery store, filling their gas tank or buying a new pair of shorts for the summer months. 

“If you just look at the level of prices … those are still significantly higher compared to what their pre-pandemic trend was,” Yaros said. “I think that’s what’s really bothering Americans even though the rate of change is slowing.”

In some ways, Yaros said, inflation is a messaging issue. Declining costs, like flagging gas prices last month, are beneficial because it reduces the consumer expectation of inflation. The reason rising costs were so consistent in the 1970s and 1980s, he said, was in part because consumers began to expect them and were willing to finance higher and higher prices. 

It does appear that consumers are beginning to grow more optimistic that inflation is declining. A New York Federal Reserve survey released Monday showed that one-year inflation expectations had fallen to 4.1%, which is its lowest point since May 2021. The Federal Reserve’s desired inflation level is 2%.

Still, many Americans note that everyday costs remain fairly high in some sectors. 

Zach Tutor, an art curator in Mississippi, said he’s read that inflation has fallen, but he hasn’t felt it affect his wallet just yet. He and his wife recently remodeled parts of their home, and they noticed lumber prices have somewhat normalized — “or are at least not infuriatingly expensive” — but Tutor, 37, said groceries are still as expensive as ever. 

High costs have also limited the couple’s ability to make summer plans. 

“We’ve been wanting to take vacations,” Tutor said, “but looking at prices for flights and Airbnbs just makes you laugh.”

While Americans may not be feeling the easing of inflation immediately, President Joe Biden indicated Tuesday’s news was an important step. Calling it “good news for hardworking families,” Biden noted that the inflation rate “has fallen for 11 months in a row.”

“While there is more work to do, the plan that I laid out a year ago to bring down the cost of living and sustain stable and steady growth is working,” the president said, noting actions his administration has taken to address gas shortages, prescription drug prices and health insurance premiums. 

Furman noted the Federal Reserve remains far from where it wants to be, and it is difficult to know whether they will be able to resolve the issue without too much economic pain. In its history, he said, the Fed has never engineered a soft landing from such a high inflationary period. 

“The big question is less about how much inflation is going to come down and more, how will it come down?” Furman said. “Is it the easy way of just fading away or the hard way with a recession?” 

Fed officials will announce Wednesday whether they will once again hike interest rates. Most economists expect they will not pursue an increase, and instead hold at the current rate to see how it affects the economy and job growth further. 

A Financial Times/University of Chicago survey of 42 prominent economists published Saturday found that 57% of those polled believed it severely unlikely or somewhat unlikely that the Fed would choose to raise rates again this time around. 

“It takes time for all of the rate hikes that we’ve seen over the past year to really filter into the economy and slow things down — slow inflation, slow growth, and especially slow job growth,” Yaros said. “We expect that the Fed is going to wait and just see what the cumulative impact of all the tightening and monetary policy that has occurred does to the economy.”

Inflation is falling; that’s the good news.

But in a quirk of the calendar, Social Security beneficiaries are likely to miss out on another large improvement to their buying power in 2024, one year after seeing the largest annual cost-of-living adjustment in four decades.

It’d be a blow to a group struggling with the soaring cost of everyday items.

The Bureau of Labor Statistics reported this week that the annual Consumer Price Index for All Urban Consumers — the standard measure covering most of the U.S. population — fell to 4% in May, the lowest reading in two years.

The figure was even lower for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): 3.6%. This alternative index is the one used to determine the annual cost-of-living adjustment for Social Security recipients.

On the face of it, it’s good news: The pace of price growth for fixed-income recipients is falling even faster than for the wider population.

And given its current trajectory, the CPI-W is likely to fall even further as the year progresses.

The wrinkle here is that the Social Security Administration calculates the next year’s cost-of-living adjustment (COLA) using the average of the CPI-W readings for July, August and September.

As a result, it is likely to capture a reading that fails to reflect the totality of outsized price increases that fixed-income recipients have been experiencing since 2021, when inflation began to soar.

In a release Tuesday, the Senior Citizens League, an advocacy group, estimated the cost-of-living adjustment for 2024 could be as small as 2.7%, a significant decrease from this year’s 8.7% bump.

According to the League’s calculations, over the past three years or so, the average Social Security benefit fell behind by approximately $1,054, ‘leaving 53% of retirees doubting they will recover because household costs rose more than the dollar amount of their COLAs,’ the League said.

In a separate press release last month, the League calculated that the oldest Social Security beneficiaries — those who retired before 2000, who would now be at least 85 years old — have lost 36% of their buying power over the past two decades. The organization blames inadequate COLA increases amid surging price growth for goods and services that are most commonly used by seniors.

Mary Johnson, policy analyst with the League, said that absent a policy intervention from federal lawmakers, she doubts a full catch-up will ever occur.

‘While the rate of price increases has slowed, they’re still higher than they were at the start of the inflationary period — much higher,’ Johnson told NBC News.

‘The job of Social Security since the 1930s has been to lift older Americans out of poverty,’ Johnson said. ‘It’s going to take all of us working together to protect it.’

Bud Light lost its top spot in the U.S. beer market last month, as the brand’s sales sag following a conservative uproar over its partnership with transgender social media influencer Dylan Mulvaney.

Constellation Brands’ Modelo led the market as it nabbed 8.4% of beer sales from retail stores in the four weeks that ended June 3, according to NielsenIQ data from consulting firm Bump Williams. Bud Light trailed with a 7.3% share in the period.

Bud Light sales fell 24.6% in the period year over year, while Modelo sales jumped 10.2%, the data shows.

Still, the Anheuser-Busch InBev brand Bud Light leads U.S. beer sales so far this year, according to Bump Williams.

Modelo beer.Justin Sullivan / Getty Images

The hit to AB InBev’s business marks one of the few times in recent years that online backlash has led to a notable and sustained slump for a major brand. The company’s shares have dropped nearly 15% since the start of April, when Mulvaney posted a video of a personalized Bud Light can, which sparked anti-LGBTQ outrage.

In response to the uproar, the company appeared to neither defend the promotion with Mulvaney — a hesitance that angered some supporters of trans rights — nor appease the conservatives who opposed the marketing.

“We never intended to be part of a discussion that divides people. We are in the business of bringing people together over a beer,” Anheuser-Busch CEO Brendan Whitworth said in a statement in April.

The boycott against Bud Light comes as state and federal politicians increasingly push to claw back the rights of trans people. Hundreds of state laws have targeted trans Americans in recent months, putting further strain on members of an already marginalized group.

Inclusion of and marketing to trans Americans, and LGBTQ people more broadly, has grown more common among major companies in recent years. But the increasingly aggressive response to those campaigns has appeared to curb them, at least in some instances.

Target recently pulled some Pride month merchandise after isolated incidents where customers threatened employees over Pride items. And the union representing Starbucks baristas this week claimed employees at dozens of stores were not allowed to put up Pride decorations.

Last month, a spokesperson for Target said the retailer had “experienced threats impacting our team members’ sense of safety and wellbeing while at work” and would remove unspecified “items that have been at the center of the most significant confrontational behavior.” The spokesperson added Target would focus on “moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”

Starbucks said in a statement it had not changed company policy on the decorations and is encouraging stores to celebrate Pride month.

Jurors in federal court have awarded $25.6 million to a former Starbucks regional manager who alleged that she and other white employees were unfairly punished after the high-profile arrests of two Black men at a Philadelphia location in 2018.

Shannon Phillips won $600,000 in compensatory damages and $25 million in punitive damages on Monday after a jury in New Jersey found that race was a determinative factor in Phillips’ firing, in violation of federal and state anti-discrimination laws, Law360 reports.

In April 2018, a Philadelphia store manager called police on two Black men who were sitting in the coffee shop without ordering anything. Phillips, then regional manager of operations in Philadelphia, southern New Jersey, and elsewhere, was not involved with arrests but lost her job less than a month later after objecting to another white manager being placed on leave amid the uproar, according to her lawsuit.

The company’s rationale for suspending the district manager, who was not responsible for the store where the arrests took place, was an allegation that Black store managers were being paid less than white managers, according to the lawsuit. Phillips said that argument made no sense since district managers had no input on employee salaries.

The lawsuit alleged Starbucks was instead taking steps to “punish white employees” who worked in the area “in an effort to convince the community that it had properly responded to the incident.”

During closing arguments on Friday, Phillips’ lawyer Laura Mattiacci told jurors that the company was looking for a “sacrificial lamb” to calm the outrage and show that it was taking action, Law360 reported. Picking a Black employee for such a purpose “would have blown up in their faces,” she said.

Starbucks denied Phillips’ allegations, saying the company needed someone with a track record of “strength and resolution” during a crisis and replaced her with a regional manager who had such experience, including navigating the aftermath of the 2013 Boston Marathon bombings, Law360 reported.

“A peacetime leader is very different from a wartime leader,” Starbucks attorney Richard Harris said during his closing arguments, Law360 reported. “These were turbulent times. Starbucks needed someone to show strength and resolution.”

Phillips’ attorney, however, cited earlier testimony from a Black district manager, who was responsible for the store where the arrests took place, who described Phillips as someone beloved by her peers and worked around the clock after the arrests.

Phillips broke into tears and hugged one of her lawyers after the verdict was read, Law360 reported. In an email, Mattiacci confirmed the award amount and said the judge will consider awarding back pay and future pay, as well as attorney’s fees. Mattiacci told the New Jersey Law Journal that she will seek about $3 million for lost pay, and roughly $1 million on her fee application. Starbucks declined comment Tuesday.

In the April 2018 incident, Rashon Nelson and Donte Robinson were arrested in a Starbucks coffee shop near tony Rittenhouse Square in Philadelphia shortly after the manager called police to report that two men were refusing to either make a purchase or leave the premises. They were later released without charges.

Video of the arrest prompted national outcry and led the current CEO of Starbucks to personally apologize to the men. The company later reached a settlement with both men for an undisclosed sum and an offer of free college education. The company also changed store policies and closed locations across the country for an afternoon for racial-bias training.

The two men also reached a deal with the city of Philadelphia for a symbolic $1 each and a promise from officials to set up a $200,000 program for young entrepreneurs. The Philadelphia Police Department adopted a new policy on how to deal with people accused of trespassing on private property — warning businesses against misusing the authority of police officers.

It’s a fighter.

Modelo Especial has officially become the bestselling beer in the U.S., surpassing Bud Light among brews purchased at supermarkets and convenience stores.

The fact that the Mexican import beat the embattled Bud Light may have come as a surprise to some.

But consumer experts say Bud Light’s demotion has long been in the making as a new, younger generation of beer drinkers topples well-established brands. And many of those young consumers are simply switching away from beer altogether.

‘[Bud Light] is a brand that was reliably shrinking in sales every single year for over a decade,’ said Matthew Barry, industry manager of food and beverage at the Euromonitor International consumer brand data group.

Modelo, meanwhile, has seen exceptional sales growth for years, Barry said.

One might assume Modelo’s ascension coincides with the rise of a Latin-centric, beer-drinking demographic. But Scott Scanlon, executive vice president of beverage alcohol at Circana, said that’s only part of the story, noting that Modelo “has transcended to become mainstream for quite some time.”

Younger drinkers are now more inclined to seek out imports, even if the price point is higher, said Harry Schuhmacher, editor and publisher of the trade publication Beer Business Daily. Schuhmacher said that while Modelo’s taste may resemble that of other premium beers, including Bud Light, its image is fresher and less associated with previous generations of beer drinkers.

‘Americans still prefer the light category: light color, light tasting,’ Schuhmacher said. As Bud, Miller and Coors drinkers age out of the beer category altogether, he said, Modelo Especial has captured a larger market share.

‘Even though it’s similar because people like that style, it ticks all the right boxes,’ he added.

In the past month, Modelo Especial sales have surged 14%. That surge coincides with a boycott of Bud Light in the wake of parent company AB InBev’s decision to partner with Dylan Mulvaney as a brand spokesperson, as well as comments made by a since-ousted marketing executive about transforming Bud Light’s ‘fratty’ image.

Modelo has also been successful at tapping into sports marketing — especially mixed martial arts (MMA) and boxing, two of the fastest-growing sports categories in the country, Schuhmacher said.

‘If you project the pre-boycott sales trends into the future, Modelo was going to hit No. 1 status in the U.S. within a few years anyway,’ said Barry, the industry manager at the Euromonitor International.

As for Corona — another Mexican import whose brand, like Modelo, is owned by the Rochester, New York-based Constellation Brands — its audience is narrower, according to Schuhmacher.

‘Corona is for an older, whiter audience,’ he said. ‘Modelo Especial has been positioned, on purpose, for a younger, more diverse market.’

AB InBev’s share price has finally rebounded after suffering an approximately 15% decline since the start of the Mulvaney controversy in April.

Still, over the past five years, its share price has declined 40%.

But rival Constellation Brands has not seen outsized performance during the same five-year period either, with shares climbing about 7%.

There’s some disagreement about the future of the beer category overall, as the decadelong craft beer frenzy fades. Barry believes Modelo’s ascension may prove a pyrrhic victory.

‘Once the exodus of Bud Light drinkers stops, they are going to find they are really in the same boat,’ he said of AB InBev’s Bud Light and Constellation’s Modelo. ‘How do you market these beers to younger generations without alienating your existing consumer base? That is going to be a really difficult needle to thread for them all in the coming years.” 

Scanlon, from the consumer insight company Circana, said beer sales will continue to underperform spirits, which now dominate the alcoholic beverage category. Circana data show beer sales growth remains slow but steady, at about 2%.

‘The overarching story is that beer has stabilized,’ he said.