Inflation hits 40-year high as CPI rises 8.6% in May
U.S. consumer prices accelerated in May to the highest since 1981, as Americans grapple with a surge in the cost of gas, food, and shelter, data showed Friday.
The Bureau of Labor Statistics’ May Consumer Price Index (CPI) showed a year-over-year increase of 8.6% last month, up from 8.3% in April. Economists were expecting an 8.3% increase in May, according to estimates compiled by Bloomberg.
On a monthly basis, the broadest measure of inflation climbed 1.0%, compared to 0.3% in April. “Core” inflation, which strips out the more volatile costs of food and gas, rose 6% over the prior year in May, more than the 5.9% that was expected.
The biggest contributors to the latest jump in inflation were shelter, gasoline, and food, according to the BLS. The energy index rose 3.9% month-on-month in May, with the gasoline index rising 4.1%. Compared to the prior year, energy prices in May were up 34.6%, the most since September 2005.
Meanwhile, the food index rose 1.2% from April to May and 10.1% over the prior year, the largest jump since March 1981.
The cost of shelter rose 0.6% in May when compared to the prior month, the largest jump since March 2004. Owners’ equivalent rent, a component of the shelter index, rose 0.6% in May, the most since August 1990.
Ahead of Friday’s report, economists had expected the CPI would keep pace with April’s reading, showing at least tentative a sign that inflation has peaked.
Following this report, stock futures fell as investors anticipate continued aggressive action from the Federal Reserve to raise interest rates in an effort to slow price increases across the economy.
(This post is breaking. Please check back for updates.)
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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