Raising inflation hit a new four-decade high in the U.S.
According to the Bureau of Labor Statistics, consumer prices surged 8.6% last month, faster than April’s year-on-year increase of 8.3% and the fastest increase since December 1981.
Excluding food and energy prices, the “core inflation” jumped 0.6% in May for the second straight month, and now sits 6% above from last year’s.
In May energy prices rose 3.9% from a month ago, sending the annual increase to 34.6%. Fuel oil posted a 16.9% monthly gain, sending the 12-month surge to 106.7%. Food costs also climbed another 1.2% in May, bringing the year-over-year gain to 10.1%.
Shelter costs, which account for about a one-third in the CPI, rose 0.6%, the fastest one-month gain since March 2004.
According to the report released Friday, prices jumped 1% from April to May, much faster than the 0.3% increase from March to April.
Just when analysts thought inflation peaked last March, Friday’s numbers seem to add fears that the U.S. economy is nearing a recession.
Under heavy pressure, the Federal Reserve has signaled that it will raise its key rate by a half-point next week and again in July to fight inflation. Now there are some questions that a third half-point hike will go for September.
The Fed’s goal to control inflation by raising interest rates will also have an impact on higher borrowing costs for both consumers and businesses.