The inflation crisis continued to worsen in May, with prices rising 8.6% from the year before, according to a new report from the Bureau of Labor Statistics.
As noted by the report, the 8.6% increase was the “largest 12-month increase since the period ending December 1981.”
Soaring energy prices greatly contributed to the worsening inflation rate. The Bureau of Labor Statistics wrote, “The energy index rose 34.6 percent over the past 12 months. The gasoline index increased 48.7 percent over the span. The index for fuel oil more than doubled, rising 106.7 percent; this represents the largest increase in the history of the series, which dates to 1935. The index for electricity rose 12.0 percent, the largest 12-month increase since the period ending August 2006. The index for natural gas increased 30.2 percent over the last 12 months, the largest such increase since the period ending July 2008.”
The record high inflation rate was even worse than economists projected. As reported by CNBC, the “consumer price index, a wide-ranging measure of goods and services prices, increased even more than the 8.3% Dow Jones estimate. Excluding volatile food and energy prices, so-called core CPI was up 6%, slightly higher than the 5.9% estimate.”
“On a monthly basis, headline CPI was up 1% while core rose 0.6%, compared with respective estimates of 0.7% and 0.5%,” CNBC added.
“It’s hard to look at May’s inflation data and not be disappointed,” said Morning Consult’s chief economist, John Leer. “We’re just not yet seeing any signs that we’re in the clear.”
“Obviously, nothing is good in this report,” said Julian Brigden, president of the global macroeconomic research firm MI2 Partners. “There is nothing in there that’s going to give the Fed any cheer. … I struggle to see how the Fed can back off.”
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