News Update

Inflation still climbing: Prices rise 8.6% in May, the fastest rate in 40 years

By ,

Consumer prices in May proved inflation still has a stranglehold on the country, rising 8.6% from one year ago — the fastest pace in 40 years. May’s data exceeds expectations with analysts believing prices had peaked in March at 8.5% before falling to 8.3% in April, but rising energy and food prices continue to burden Americans.

Month over month, prices in May increased 1.0%, compared with a much slower pace of 0.3% in April.

Excluding food and energy, core inflation was up 6.0% in May compared with one year ago, down from April’s 6.2% rate. The report showed no sector saw prices drop in May after used vehicles and apparel showed some relief in April.

While the Federal Reserve pays closer attention to core prices, which are less volatile than food and energy, many Americans are feeling the most price pain precisely in those two areas. On Friday, the day the Bureau of Labor Statistics released the latest inflation report, the national gas price average reached $4.986 per gallon, a new national record and nearly $2 higher than a year ago, according to American Automobile Association.

  • Energy prices are up 3.9% from April to May and 34.6% on the year.
  • Gas prices are up 4.1% from April to May and 48.7% on the year.
  • Groceries are up 1.4% from April to May and 11.9% on the year.

Housing continues to be heated, with the shelter index up 5.5% in May compared with a year ago, which many experts say is less than the true cost increase. However, economists predict the housing and rental market is showing signs of cooling off in the coming months.

The same can’t be said for food and energy, which continues to rise at double digit annual rates. Russia’s war on Ukraine and resulting sanctions continue to exacerbate these two price categories.

In order to clamp down on high prices and eventually reach the Federal Reserve’s target inflation rate of 2%, the central bank has started to tighten monetary policies. After twice raising its benchmark interest rate in March and May, the market expects the Fed will boost it another 50 basis points on June 15, the same day it begins shrinking its $8.9 trillion balance sheet to pull money from the overheated economy.

SIMONE DEL ROSARIO: BREAKING THIS MORNING – INFLATION NUMBERS ARE COMING IN HOT – REACHING A NEW 4-DECADE HIGH OF 8.6% IN MAY.

THIS BLASTS THROUGH ESTIMATES AND THE THEORY THAT MARCH’S 8.5% WAS THE PEAK, AFTER CONSUMER PRICES FELL SLIGHTLY IN APRIL.

MAY PROVES INFLATION STILL HAS A STRANGLEHOLD IN THIS COUNTRY, WITH PRICES RISING IN EVERY CATEGORY FOR THE MONTH.

GROCERIES ARE UP 1.4% THIS MONTH ALONE

WHILE TOTAL ENERGY PRICES ROSE 3.9% FROM APRIL TO MAY

EVEN USED CARS – WHICH HAVE BEEN DECLINING FOR MONTHS, SPIKED 1.8% IN MAY.

YEAR OVER YEAR, WE HAVE THE NEW HIGH OF 8.6% ON PRICES.

BUT THIS IS THE NUMBER THE FEDERAL RESERVE LIKES TO LOOK AT. CORE CONSUMER PRICES – EXCLUDES MORE VOLATILE FOOD AND ENERGY, AND THAT’S DOWN A TICK, AT 6% COMPARED TO APRIL’S 6.2.

BUT FOOD AND ENERGY IS WHERE AMERICANS ARE FEELING THE MOST PRICE PAIN, AND THESE TWO AREAS CAN’T BE AVOIDED.

AND BOTH OF THOSE ARE UP DOUBLE DIGITS ON THE YEAR.

AS WE SPEAK, GAS PRICES HIT A NEW NATIONAL RECORD OF $4.99 ACCORDING TO TRIPLE A. THAT’S NEARLY TWO DOLLARS MORE PER GALLON THAN A YEAR AGO, AND A SURE SIGN WE’LL HIT 5 BUCKS A GALLON ANY DAY – AND THAT PRICE INCREASE WILL BE REFLECTED IN NEXT MONTH’S REPORT.

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO. 

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Comments are still pending approval. Rate this story to add your own thoughts below.

Get ready to rate in…

lock

Watch the video to unlock rating

Your Rating

Rating closes in 4 days

Total User Rating

eye icon

Rate to reveal

Community ratings are revealed after you rate the story.

comment bubbles

Consumer prices in May proved inflation still has a stranglehold on the country, rising 8.6% from one year ago — the fastest pace in 40 years. May’s data exceeds expectations with analysts believing prices had peaked in March at 8.5% before falling to 8.3% in April, but rising energy and food prices continue to burden Americans.

Month over month, prices in May increased 1.0%, compared with a much slower pace of 0.3% in April.

Excluding food and energy, core inflation was up 6.0% in May compared with one year ago, down from April’s 6.2% rate. The report showed no sector saw prices drop in May after used vehicles and apparel showed some relief in April.

While the Federal Reserve pays closer attention to core prices, which are less volatile than food and energy, many Americans are feeling the most price pain precisely in those two areas. On Friday, the day the Bureau of Labor Statistics released the latest inflation report, the national gas price average reached $4.986 per gallon, a new national record and nearly $2 higher than a year ago, according to American Automobile Association.

  • Energy prices are up 3.9% from April to May and 34.6% on the year.
  • Gas prices are up 4.1% from April to May and 48.7% on the year.
  • Groceries are up 1.4% from April to May and 11.9% on the year.

Housing continues to be heated, with the shelter index up 5.5% in May compared with a year ago, which many experts say is less than the true cost increase. However, economists predict the housing and rental market is showing signs of cooling off in the coming months.

The same can’t be said for food and energy, which continues to rise at double digit annual rates. Russia’s war on Ukraine and resulting sanctions continue to exacerbate these two price categories.

In order to clamp down on high prices and eventually reach the Federal Reserve’s target inflation rate of 2%, the central bank has started to tighten monetary policies. After twice raising its benchmark interest rate in March and May, the market expects the Fed will boost it another 50 basis points on June 15, the same day it begins shrinking its $8.9 trillion balance sheet to pull money from the overheated economy.

Get ready to rate in…

Community Rating

Community ratings are revealed after you rate the story.

lock

Watch the video to unlock rating

Rate the bias

Keep us honest! Let us know if you thought this video was neutral or biased.

Comments are still pending approval. Rate this story to add your own thoughts below.