Rising inflation in US is at a new four-decade high and giving American households no respite from rising costs with prices of petrol, food and most other goods and services jumped in May.
According to Labor Department, consumer prices surged 8.6% last month from a year earlier, faster than April’s year-over-year increase of 8.3%.
The newly printed red hot inflation figure, the highest figure released ever since 1981, will put more pressure on the Federal Reserve to continue raising interest rates aggressively.
On a month-to-month basis, prices jumped 1% from April to May, much faster than the 0.3% increase from March to April. Contributing to that surge were much higher prices for everything from airline tickets to restaurant meals to new and used cars. Those price spikes also elevated so-called “core” inflation, a measure that excludes volatile food and energy prices. In May, core prices jumped a sharp 0.6% for a second straight month. They’re now 6% above where they were a year ago.
The released figure underscored fears that inflation is spreading well beyond energy and goods whose prices are being driven up by clogged supply chains and Russia’s invasion of Ukraine. The report sent equities prices diving.
The increased pressure on the Fed to raises rates even faster — which means higher-cost loans for consumers and businesses — will raise the risk of a recession, too. Gas prices rose 4% just in May and have soared nearly 50% in one year.
