Money, money, money
Consumer prices in May jumped five percent over the last year, Bloomberg reported Thursday, in their "largest annual gain since August 2008." As the U.S. continues to reopen and Americans begin to move on from their year inside, economists attribute jacked-up prices to an "increased consumer appetite" for goods and services amidst a shortage of several types of materials, per The Wall Street Journal.
Although some economists are concerned, the Federal Reserve has "repeatedly" emphasized its belief that inflationary pressures are temporary, The Associated Press reports. Eventually, once bottlenecks clear, "supply will rise to match demand." It's also worth noting inflation numbers may look "especially large" when compared to the bottomed-out U.S. economy this time last year — a phenomenon known as the "base effect."
Still, a galvanized population of eager Americans "willing to shell out more than they might be normally;" a surplus of job openings, but a dearth of workers; and an increase in the cost of raw materials (and wages) for companies like Chipotle, General Mills and Campbell's contribute to fears of "bigger" and "prolonged" price spikes, per the Journal and AP.
Although it's tough to say, some economists, like Chief U.S. Financial Economist at Oxford Economics Kathy Bostjancic, believe prices will "revert back to a lower level" next year. Read more at the Journal.