Inflation in May hits highest level in more than 4 decades
U.S. inflation increased 8.6 percent from a year ago in May, the fastest increase since December 1981, the Labor Department reported Friday.
The May reading of the Consumer Price Index — which measures what consumers pay for goods and services — was also up from that of April, which saw a slight moderation from March.
Shelter, gasoline, and food prices all contributed to the May jump, CNBC reports. Energy costs rose 34.6 percent from a year ago, while shelter costs jumped 5.5 percent over the same period — "the most since February 1991." Groceries were up 11.9 percent on the year.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Markets did not react well to the report, "with stock futures indicating a sharply lower open on Wall Street and government bond yields rising," CNBC writes. The Friday numbers are also unfortunately at odds with hopes that rampant inflation may have peaked, and perhaps add to concerns the economy is close to a recession.
In an attempt at taming rising prices without triggering an economic downturn, the Federal Reserve has been working fastidiously to cool the economy, most notably by raising interest rates. Officials with the central bank will meet again next week to consider another increase, following a half-point hike in May, notes The Wall Street Journal.
Though he described the May report as "really troubling," economist Justin Wolfers said "there's reason to be optimistic that many goods prices will actually fall."
"And while energy prices have risen, once they stop rising, they'll stop contributing to inflation," he added.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
The Pentagon faces an uncertain future with Trump
Talking Point The president-elect has nominated conservative commentator Pete Hegseth to lead the Defense Department
By Justin Klawans, The Week US Published
-
This is what you should know about State Department travel advisories and warnings
In Depth Stay safe on your international adventures
By Catherine Garcia, The Week US Published
-
'All Tyson-Paul promised was spectacle and, in the end, that's all we got'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Boeing machinists approve contract, end strike
Speed Read The company's largest union approved the new contract offer, ending a seven-week strike
By Peter Weber, The Week US Published
-
US economy still strong in final preelection report
Speed Read It grew at a solid 2.8% annual rate from July through September
By Peter Weber, The Week US Published
-
Boeing machinists reject deal, continue strike
Speed Read The rejection came the same day Boeing reported a $6.2 billion quarterly loss
By Peter Weber, The Week US Published
-
Ports reopen after dockworkers halt strike
Speed Read The 36 ports that closed this week, from Maine to Texas, will start reopening today
By Peter Weber, The Week US Published
-
Fed cuts rates half a point, hinting victory on inflation
Speed Read This is the Fed's first cut in two years
By Peter Weber, The Week US Published
-
US inflation drops below 3%, teeing up rate cuts
Speed Read This solidifies expectations that the Federal Reserve will finally cut interest rates in September
By Peter Weber, The Week US Published
-
Would Trump's tariff proposals lift the US economy or break it?
Talking Points Economists say fees would raise prices for American families
By Joel Mathis, The Week US Published
-
US inflation cools further in welcome sign for economy
Speed Read Prices fell in June for the first time in four years
By Rafi Schwartz, The Week US Published