U.S. consumer prices surge in May, recording largest 12-month increase since 2008

Photo by Sunyu Kim on Unsplash
advertisement
Testing Article Top Adspace

WASHINGTON, (Xinhua) — U.S. consumer prices rose 0.6 percent in May, with a 12-month increase of 5.0 percent, the U.S. Labor Department reported Thursday.

That marks the largest 12-month increase since a 5.4-percent increase for the period ending August 2008, according to the report.

The latest data followed a 0.8-percent growth in consumer price index (CPI) in April, the report showed.

In May, the 0.6-percent month-on-month growth in CPI continued to be partially driven by the 7.3-percent surge for the index of used cars and trucks, which accounted for about a third of the all-items increase.

advertisement

The food index was up by 0.4 percent in May, the same level of growth in April.

The energy index, meanwhile, was unchanged in May, with a decline in the gasoline index again offsetting increases in the electricity and natural gas indexes.

Excluding the volatile food and energy categories, the so-called core CPI rose 0.7 percent in May, following a 0.9-percent increase in April.

The index for all items excluding food and energy rose 3.8 percent over the last 12 months, the largest 12-month increase since the period ending June 1992.

For months, the annual core CPI had been below 2 percent, the central bank’s inflation target, until April, when it saw a 3.0-percent 12-month increase.

U.S. firms are facing rising costs and labor shortages amid supply chain disruptions, according to the Federal Reserve’s latest survey on economic conditions, known as the Beige Book, released last week.

Fed governor Lael Brainard recently said the supply-demand mismatches at the sectoral level, which pushed up consumer prices and held back more hiring, are likely to be temporary, and urged the central bank to remain steady on its ultra-loose monetary policy.

The Fed has pledged to keep its benchmark interest rates unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month, until the economic recovery makes “substantial further progress.”