Annual US Consumer Price Inflation Rises 5% in May: Government

Annual US Consumer Price Inflation Rises 5% in May: Government

(Representative image)

WASHINGTON: U.S. consumer prices skyrocketed last month, and the inflation rate accelerated to 5 percent during the 12 months ending in May as prices for energy and used cars surged, said the Thursday the government.
That continues the trend seen since January, when the world’s largest economy recovers and prices rebound from steep declines in the first weeks of the Covid-19 pandemic.
Excluding volatile food and energy, the “core” consumer price index (CPI) rose 3.8 percent over the past year, without seasonal adjustment, “the largest 12-month increase since the period ending in June. 1992, “said the Department of Labor.
The CPI rose 0.6 percent last month, seasonally adjusted, slower than in April but higher than the consensus forecast. The core CPI increased 0.7%.
A third of the increase was due to used cars, which were up 7.3 percent compared to April and are up nearly 30 percent in the past 12 months, according to the report.
Oil prices, which collapsed and even turned negative last year, have rebounded with the economy reopening, with the data showing a 56.2 percent increase compared to May 2020.
That jump reflects so-called “base effects,” the comparison with very low rates, like last year, which Federal Reserve officials say will be “transitory” and fade in the coming months.
In fact, the report said that gasoline prices fell 0.7 percent in May compared to the previous month.
Despite repeated assurances from central banks that they can contain inflation, mounting price pressures raise concerns about the risk of the economy overheating.
But most economists agree that inflation will be manageable.
Joseph Brusuelas of consultancy RSM US played down the fears and pointed to the modest 2.2% increase in the cost of housing.
“Ok folks, this is not exactly the 1970s-style inflation issue,” he said on Twitter. “If rents are at 2 percent, the inflation trade is over.”



Source link