The Four-Decade High Inflation Accelerated in May
- Jun 10, 2022
- Brian Turner
Consumer prices rose at the fastest pace in May since December 1981 as inflation seeped deeper in all activities of the economy. The broad price increases are showing no signs of abating, putting more pressures on policy makers.
Consumer prices in May rose at the fastest pace as the surge in energy price continued in the month.
The Consumer Price Index increased 1.0% in May on a seasonally adjusted basis after rising 0.3% in April, the U.S. Bureau of Labor Statistics reported today.
Over the last 12 months, the all items index increased 8.6% before seasonal adjustment, faster than 8.3% in the previous month.
The all items index increased 8.6% for the 12 months ending May, the largest 12-month increase since the period ending December 1981.
The annual price increases have been accelerating since the lifting of pandemic restrictions as businesses struggle with supply chain issues and rising costs of commodities, food, and energy.
The index for all items less food and energy rose 0.6% in May, matching increase in April.
On a monthly basis, food prices rose 1.2%, energy prices surged 3.9%, and shelter prices rose 0.6%.
On a year basis, food prices surged 10.1%, energy prices 34.6%, and shelter cost rose 5.5%.
Gasoline prices in the year soared 48.7% and fuel oil prices soared 106.7%.
Cost of new vehicles rose at 1.0% from the previous month or 12.6% annually and used vehicles prices rose 1.8% and 16.1% on a monthly and annual basis.
Medical care services rose at the slowest pace of 4% in the year.
The Bureau of Labor Statistics gathers data from about 8,000 households, 23,000 retailers and about 50,000 landlords.
Shelter carries the largest weight in the index, the cost of owning or renting a home, accounts for 32.4% of all expenditures and has not increased as much as other items, despite the recent runup in home prices.
However, food accounting for about 14% of all expenditures has jumped in double digits for more than a year and transportation accounting 8% has more than doubled in two-years.
Three days ago, Treasury Secretary Janet Yellen said in her testimony before the Senate Finance Committee that the U.S. inflation to "remain high for some time."