Consumers likely paid a bit more for food, autos and housing last month, though prices overall are forecast to rise by the smallest amount since November.
The Consumer Price Index is expected to increase 0.1 percent in May, according to a survey of economists by FactSet. Excluding volatile food and energy, so-called "core" prices are projected to rise 0.2 percent. The Commerce Department issues its report at 8:30 a.m.
Consumer prices rose 3.2 percent from May 2010 through April 2011, the government said last month. It was the biggest one-year gain in two and a half years. Excluding the volatile food and energy categories, which account for about 20 percent of the index, so-called "core" prices rose only 1.3 percent in that same period. That's below the Federal Reserve's informal inflation target of about 2 percent.
Some inflation can be healthy for the economy because it encourages people to spend and invest rather than sitting on their cash. More spending drives corporate growth, which makes businesses more likely to hire people.
But higher food and gas prices have slowed growth this year. Consumers have had to spend more at the grocery stores and to fill their tanks, leaving less money for spending on other goods and services, like appliances, furniture and vacations, that drive the economy.
There are signs that those prices are easing, and if they fall further, that could lift consumer spending and boost growth in the second half of the year.
Gas prices reached a national average of $3.98 per gallon May 6, driven higher by overseas demand and turmoil in the Middle East. Since then, the average price has fallen to just under $3.70. That's still $1 higher than a year ago.
Wholesale food prices, meanwhile, fell 1.4 percent in May, the steepest drop in nearly a year, the government said Tuesday. Much of that decline resulted from a sharp fall in vegetable and fruit prices. Most economists expect overall food prices to stabilize later this year.
Changes in grain and corn prices take longer to filter down to grocery stores than changes in oil prices do to gas stations. That's because grains and other commodities represent a smaller fraction of food costs in the U.S than in other countries. By contrast, oil prices are the biggest factor in the cost of gas.
Corn, wheat and other agricultural commodities have risen sharply in price since last summer. Bad weather in several countries and rising demand in fast-growing developing markets are to blame. But those increases have slowed in recent months.
Slower inflation would leave Americans with more money to spend to stimulate the economy, including keeping more of a cut in Social Security taxes that took effect in January. Economists expect the increased spending to raise overall economic growth to an annual rate of 3 percent in the second half of this year. In the first three months of this year, it was 1.8 percent.
A report late Monday by the U.S. Agriculture Department showed that the corn crop has weathered recent flooding along the Mississippi River better than many analysts expected. That sent corn prices down 27 cents to $7.56 a bushel on Tuesday, though that is still more than double what it was a year ago.
Federal Reserve Chairman Ben Bernanke has said that the rise in food and gas prices would likely be temporary. The central bank has also said it is watching closely for any signs of persistent inflation.
Eight months ago, the core index rose only 0.6 percent in a year because the sluggish economy made retailers reluctant to raise prices. At that time, the Fed was more concerned about falling prices. The October reading was the smallest increase since the index began in 1957.
Inflation will remain a risk. Commodity prices are volatile and subject to global turmoil. As recently as last winter, economists were worried that inflation was too low.