US consumer prices rise at fastest annual rate since December 1981
(RTTNews) – Consumer prices in the United States rose more than expected in May, according to a highly anticipated report released Friday by the Department of Labor.
The Labor Department said its consumer price index jumped 1.0% in May after rising 0.3% in April. Economists expected consumer prices to rise 0.7%.
With a larger-than-expected monthly increase, the annual rate of consumer price growth accelerated to 8.6% in May from 8.3% in April, posting the largest increase since December 1981. Annual growth should remain unchanged.
The monthly jump in consumer prices was partly explained by a substantial rebound in energy prices, which jumped 3.9% in May after falling 2.7% in April.
Food prices also continued to show notable growth, jumping 1.2% in May after rising 0.9% the previous month.
Excluding food and energy prices, core consumer prices rose 0.6% in May, matching the growth seen in April. Core prices are expected to increase by 0.5%.
The increase in base prices partly reflects higher prices for housing, air fares, used cars and trucks, and new vehicles.
Meanwhile, the annual rate of growth in core consumer prices slowed to 6.0% in May from 6.2% in April. Economists expected the pace of growth to slow to 5.9%.
“The larger increases in core prices a year ago mean that core inflation has fallen further to 6.0% from 6.2%, but there is very little in the details of this report to suggest that inflationary pressures are easing,” said Michael Pearce, Senior US Economist at Capital Economics.
He added: “With the continued strength of the latest activity data, this reinforces the Fed hawks’ case for continuing the series of 50 basis point rate hikes through September and beyond, or even to increase the magnitude of future rate hikes meetings.
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