US CPI Inflation Gains to 8.6% in May, Exceeding Estimates


Category:  News & Politics

Via:  texan1211  •  2 months ago  •  10 comments

By:   Ben Winck (Markets Insider)

US CPI Inflation Gains to 8.6% in May, Exceeding Estimates
The Consumer Price Index - a popular US inflation gauge - rose 8.6% in the year through May, marking the highest read since December 1981.

S E E D E D   C O N T E N T

All signs point to groceries getting more expensive, or going out of stock. Luis Alvarez

  • The Consumer Price Index rose 8.6% in the year through May, according to data out Friday.
  • That's the highest inflation rate since December 1981.
  • The May report shows inflation picking back up as gas prices ripped to record highs.

Inflation swung higher last month as surging gas costs overpowered the Federal Reserve's efforts to slow price growth.

The Consumer Price Index — a closely watched inflation gauge — rose 8.6% in the year through May, the Bureau of Labor Statistics said Friday morning, marking the highest read since December 1981. Economists surveyed by Bloomberg expected the one-year rate to hit 8.3% through the month.

The print reverses the slowdown seen through April and suggests inflationary pressures are still running rampant through the US economy. Many economists had hoped March would represent peak inflation after the April decline. That optimism has now been replaced with concern that inflation will hold steady at unhealthy levels.

The month-over-month CPI reading showed prices for goods and services climbing 1.0% last month. That's up from April's 0.3% uptick and above the average estimate of a 0.7% gain. The one-month gauge is usually viewed as a more telling sign of underlying inflation dynamics, as it isn't skewed by how prices were changing in the year-ago period. The acceleration in one-month inflation hints pressures intensified through May and that it could be harder to slow price growth than previously anticipated.

Last month saw energy prices rebound after showing some signs of a cooldown in April. A wide gap between Americans' demand for gasoline and overall supply lifted the average price per gallon of gas to an all-time high of $4.62 by the end of May. Prices for coal and natural gas also soared, leaving Americans with more expensive utilities and manufacturers with higher input costs.

The Friday report confirmed energy led the way in pushing inflation higher. Prices in the category rose 3.9% through the month, rebounding from the 2.7% decline seen through April. Fuel oil posted the largest one-month increase of 16.9%, while gasoline prices rose 4.1% and utility gas prices gained 8%. Energy costs now sit nearly 35% higher than year-ago levels.

Inflation through May was also broad-based, with few categories showing price declines. Such sweeping inflation is generally regarded as more worrying, as it hints that inflation has evolved from a sector-specific issue to an economy-wide trend.

Core inflation, which strips out volatile food and energy prices, also surprised to the upside. The measure rose 0.6% on a one-month basis and hit a year-over-year rate of 6%, slightly exceeding forecasts of 0.5% and 5.9% gains, respectively.

Such fast price growth only cements the Fed's shift toward a more aggressive inflation-fighting strategy. The central bank raised its benchmark interest rate by half of a percentage point on May 4, marking its second rate hike since the pandemic crash and the first double-sized hike since 2000. Chair Jerome Powell hinted in a follow-up press conference that additional half-point increases are likely "on the table" for the Fed's June and July meetings. Still, rate hikes typically take several months to have a discernible effect on the economy, and the effects of the May hike won't show up in year-over-year inflation for some time.

"Any hopes that the Fed can ease up on the pace of rate hikes after the June and July meetings now seems to be a longshot," Greg McBride, chief financial analyst at Bankrate, said.


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Professor Principal
1  seeder  Texan1211    2 months ago

Eleven months after Biden told us all that inflation was just temporary, here we are at levels not seen for over forty years.

I wish someone could Bidensplain what temporary is to him, and when American might expect the temporary rise to end.

I know most people here are focused on the "hearing", but THIS is what voters will be worrying about and considering when voting in the midterms.

Thanks, Joe.

Jeremy Retired in NC
PhD Guide
1.1  Jeremy Retired in NC  replied to  Texan1211 @1    2 months ago
I know most people here are focused on the "hearing"

That's what the Democrats were hoping for.  Everybody distracted from the train wreck the Democrats are running.

Wasn't the inflation "transatory" then "temporary" then "Putins fault"?  I think I missed a step in the blame chain.

Professor Principal
1.1.1  seeder  Texan1211  replied to  Jeremy Retired in NC @1.1    2 months ago

Oil companies and corporate greed.

Sparty On
Professor Principal
1.1.2  Sparty On  replied to  Texan1211 @1.1.1    2 months ago

Nah, it’s all Putin’s doing ......

Lucifer Morningstar
Professor Guide
1.2  Lucifer Morningstar  replied to  Texan1211 @1    2 months ago

Sure, but the demented old fool appeared on a talk show and said we are going to lower inflation by reducing the price of food and fuel.

Not to worry that they have no idea nor inclination of how to do that.

Buzz of the Orient
Professor Principal
1.2.1  Buzz of the Orient  replied to  Lucifer Morningstar @1.2    2 months ago
"Not to worry that they have no idea nor inclination of how to do that."

Sure they know how to do it.  Repeal the tariffs and cancel the sanctions, but because the voters have been led to believe in how much they are for furthering "American interests", it isn't going to happen, especially before the midterms.

Sparty On
Professor Principal
2  Sparty On    2 months ago

The human fuck up machine continues what he does best.    Screwing up everything he touches.    

Where is cornpop when you need him?

Professor Principal
3  seeder  Texan1211    2 months ago

Democrats will attempt to use the hearings to deflect from the issue at the forefront of voters' minds--inflation.

I don't think they will succeed, and they probably should have waited until October to do the hearing.

Oh, wait, at that time, Democrats will be home campaigning, and attempting to distance themselves from liberal idiot DA's, Biden's economic mess, and Harris' botched job at the border.

But Trump will be the only thing they can fall back on.

Sparty On
Professor Principal
3.1  Sparty On  replied to  Texan1211 @3    2 months ago

Next will be the abortion issue or gun control ..... anything to deflect from the shit reality they have created.    It is not going to work.

August and November are going to be a bloodbath for Dems.    I hope Pfizer has ramped up butt cream production because the butt hurt will be off the chart for our triggered fiends on the left

Professor Principal
3.1.1  seeder  Texan1211  replied to  Sparty On @3.1    2 months ago
Next will be the abortion issue or gun control .

Most Democrats are going to become completely and utterly unhinged if Roe is reversed.

Gun control will not be as big of an issue, I don't believe.

When Democrats have and have had complete control they did nothing in regards to it.


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