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• Rising food, energy, and shelter costs accounted for the increase
US consumer prices soared in May to their highest levels in more than 40 years, with surging costs for shelter, gasoline and food prices contributing to the increase.
On Tuesday, the Labor Department said that its consumer price index (CPI) jumped 8.6% compared to a year earlier, the biggest year-over-year increase since December 1981. Dow Jones estimated the inflation index to be around 8.3%.
Administration officials attributed the rise to supply chains bottlenecks, surging consumer demand, and global disruption in food and energy markets due to the Russia-Ukraine crisis.
Crunching numbers
Excluding the already high food and energy prices, the so-called core CPI rose 6% in a year. Core inflation increased 0.6% for the month, compared to the 0.5% estimate.
Energy prices were 34.6% over the year, as gasoline prices jumped 16.9% for the month, boosted by the geopolitical crisis.
Prices of food rose 1.2% for the month and nearly 10.1% over the year.
The accelerating prices reinforces the belief that the Fed will raise interest rates by 50 basis points in the coming months to tame inflation.
Source - Labor Department
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