Consumer prices rose 1% during month and 8.6% from a year ago, adding more pressure on Fed to cool the economy.
America's rampant inflation is imposing severe pressures on families, forcing them to pay much more for food, gas and rent.
Inflation has remained high even as the sources of rising prices have shifted. But their spending on plane tickets, hotels and entertainment has continued to rise. But with wages rising steadily for many workers, prices are rising in services as well. And with China easing strict Covid lockdowns in Shanghai and elsewhere, more of its citizens are driving, thereby sending oil prices up even further. Congressional Republicans are hammering Democrats on the issue in the run-up to midterm elections this fall. Lower-income and Black and Hispanic Americans, in particular, are struggling because, on average, a larger proportion of their income is consumed by necessities.
Inflation rate sends stock markets into tailspin as S&P 500 falls over 2.6% and Nasdaq down over 3.4%
The war in Ukraine and the continuing disruption to global trade caused by the coronavirus pandemic have both contributed to rising prices for food and energy. Food and energy prices are more volatile than other categories included in the CPI, and the labor department publishes a “core prices” index which excludes them. The food index rose 1.2% in May as the food at home index increased 1.4%. The Fed’s price stability resolve is going to be really tested now. Inflation is now running at a rate last seen in December 1981. According to the latest CPI report the energy index rose 3.9% over the month, with the gasoline index rising 4.1%. Other major component indexes also increased.
Record gasoline prices, paired with unrelenting food and shelter costs, are adding strain to Americans' cost of living, suggesting the Fed will have to pump the ...
Rent of primary of residence climbed 5.2% from a year earlier, the most since 1987. Rising demand for travel and entertainment this summer, particularly among wealthier households who have the savings to support discretionary spending, as well as tight labor market conditions will likely maintain upward pressure on services inflation in the coming months. Energy prices climbed 34.6% from a year earlier, the most since 2005, including a nearly 49% jump in gasoline costs. Furniture, including bedding, was one of the few categories to post a monthly decline. That will likely keep the Fed on a trajectory of 50-basis-point hikes beyond July, even though the economy is cooling.” US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. There are growing risks that price pressures in those categories will continue to build. That raises the risk of a recession, which some economists already saw as likely next year. “There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. In May, prices for necessities continued to rise at double-digit paces. Two-year Treasury yields jumped, stocks opened lower and the dollar rose. Shelter, food and gas were the largest contributors.
US consumer prices accelerated in May as petrol prices hit a record high and the cost of food soared, leading to the largest annual increase in nearly 40 ...
That was the largest year-on-year increase since December 1981 and followed a 8.3 per cent advance in April. Economists had hoped that the annual CPI rate peaked in April. In the 12 months through May, the CPI increased 8.6 per cent. The consumer price index increased 1.0 per cent last month after gaining 0.3 per cent in April. Petrol prices rebounded 4.1 per cent after falling 6.1 per cent in April. The faster than expected increase in inflation last month reported by the Labor Department on Friday also reflected a surge in rents, which increased by the most since 1990.
US inflation surged to a new four-decade high in May, defying hopes that price pressures had peaked and deepening President Joe Biden's political troubles ...
The CPI surge "raises the probability of even more aggressive Fed rate hikes to tamp down on inflationary expectations," said Mickey Levy of Berenberg Capital Markets, adding that a pause in rate hikes in September is "looking increasingly unlikely." Some economists expected the easing of pandemic restrictions to cause a shift of US consumer demand towards services and away from goods, which they said would ease inflation pressures, but prices for services increased as well. "I'm doing everything in my power to blunt Putin's price hike and bring down the price of gas and food," he said Friday while speaking at the Port of Los Angeles.
President Joe Biden will talk about inflation and his administration's efforts to lower prices on Friday in Los Angeles.
But their spending on plane tickets, hotels and entertainment has continued to rise. Goods prices are expected to fall in the coming months. Inflation has remained high even as the sources of rising prices have shifted. That’s up from about 7.5 percent in February, a steep increase in such a short period. And with China easing strict COVID lockdowns in Shanghai and elsewhere, more of its citizens are driving, thereby sending oil prices up even further. Congressional Republicans are hammering Democrats on the issue in the run-up to midterm elections later this year.
The core consumer price index, which strips out volatile parts like food and energy, rose 0.6%. As food and gasoline prices remain persistently high, they're ...
“If sentiment remains as negative as it is and income growth continues to slow, it’s hard to imagine that we don’t see a leg lower in spending at some point,” Pearkes said. “This war looks like it’s protracted and the policy response continues to tighten.” So far, consumers have drawn down on excess savings and spent at a strong level despite feeling negatively about the economy. At the end of May, the European Union chose to ban two-thirds of its Russian oil imports. The EU had been discussing the move throughout the month, and oil markets responded with higher prices. The jump was driven by energy, food, and housing prices, which put inflation on its fastest pace in 40 years.
The U.S. inflation rate reached 8.6 percent in May, its highest level in more than 40 years, putting pressure on employers to raise wages to keep pace.
"It is very unusual to see so many companies planning a second round of adjustments," said Rebecca Toman, vice president of the survey business unit at Pearl Meyer. "Normally, budgets are set well in advance for an annual rise. Also, if the first 10 days of June are anything to go by, the next monthly measure would be higher." "Yet, these organizations will find themselves at a significant strategic and operational disadvantage if demand continues as anticipated—especially as other employers offer higher base pay salaries." A May survey of 337 U.S. companies by pay consultancy Pearl Myer found that about one-third of organizations are considering or planning to provide midyear salary increases in 2022: The May CPI measure came in higher than consensus expectations that the annual rate would stay unchanged at 8.3 percent, indicating that "signs of inflation peaking in April were wrong," according to The Kobeissi Letter, an industry commentary on global capital markets. The U.S. inflation rate reached 8.6 percent in May, its highest level since December 1981, the U.S. Department of Labor (DOL) reported on June 10, putting pressure on employers to raise wages to keep pace.
Ugly” inflation is rising faster than expected in the United States with experts warning the Federal Reserve should be “worried.”
“The 1970s called and it wants its inflation back. The think tank expects inflation to start to decelerate later this year. “Why aren’t they drilling? But he acknowledged the rising inflation was a severe problem, saying in an earlier statement the United States “must do more — and quickly — to get prices down.” New to Flash? Try 1 month free. Stream more finance news live & on demand with Flash. 25+ news channels in 1 place.