The Consumer Price Index (CPI), a tool to measure the U.S. inflation, kept climbing in May, going past economists’ expectations for yet another month.
CPI increased 0.6% in May, according to the Dept. of Labor information released on Thursday, bringing the annual increase to 5%, well past the 4.7% predicted. Core CPI, a measurement of retail prices minus the more chaotic indexes for energy and food, increased 0.7% in May after a 0.9% increase in April.
The uptick in CPI is “the highest 12-month rise since a 5.4-percent rise for the time ending August 2008,” the Dept. of Labor said. The index for core CPI “increased 3.8 percent over the previous 12-months, the biggest 12-month increase since the time ending June 1992.”
Experts are still uncertain when inflation might decline. It is expected to remain elevated throughout the summer as demand comes back after the long hiatus. Prices are also increasing again after going down at the start of the pandemic and nationwide lockdowns.
The return of normal prices after this decrease is known as the base effect, and experts are still not sure how much inflation is because of this effect and how much is because of government policies.
Multi-trillion dollar relief programs and trillions of dollars in loans from the Fed are expected to force prices higher as the money finds its way into America’s economy, drastically increasing the money supply.
April’s CPI numbers revealed that inflation experienced the largest yearly rise since 2008 after the start of the Great Recession. The inflation number was in part due to increases in the prices of used vehicles as the lifting of COVID restrictions occurred. The numbers were much higher than what economists had anticipated for April.
This new data comes after last week’s Dept. of Labor report revealed May was yet another slow month for jobs, missing economists’ numbers by over 100,000 jobs.
Author: Steven Sinclaire