The cost of living in the United States jumped again in May, boosting the annual rate of inflation to an almost 13-year high, according to a government report released Thursday, June 10.
Inflation pressures increased across a broad range of goods and services last month — markedly strongly for a second straight month for used car and truck prices, although food and energy prices saw little to no change.
Longer term as compared to a year earlier, prices for food and energy continued to be robust. Core inflation, which discounts the pair, marked its highest annual rate in nearly three decades. The question remains unanswered on whether the spike in inflation is transitory due to the pandemic.
"We have not yet seen the peak in inflation, but that should occur in the current quarter, though existing pressures should keep the year-over-year pace elevated for the remainder of 2021," Reuters quoted Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.
In the headline monthly figure, U.S. consumer prices rose 0.6% in May following an increase of 0.8% in April which was the largest monthly gain since June 2009, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to electricity.
In some key consumer pricing categories:
Prices at the pump dipped 0.7% last month after falling 1.4% in April. Before then, they posted a streak of ten consecutive monthly increases. Gasoline prices surged 56.2% year-over-year for their largest 12-month increase since April 1980. That said, 12-month prices in May 2020 did log in at their weakest since February 2016.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, was unchanged compared to the decline of 0.1% in the prior month. Energy prices increased 28.5% in the past 12 months.
- Prices for food increased 0.4% for a second month in a row. Food prices rose 2.2% year-over-year.
Excluding the more volatile food and energy components, core consumer prices advanced 0.7% in May after rising 0.9% in April which registered as the biggest monthly increase since April 1982.
"Many of the same indexes [as the prior report] continued to increase, including used cars and trucks, household furnishings and operations, new vehicles, airline fares, and apparel," the Labor Department’s monthly report said.
Prices for used cars and trucks jumped 7.3% in May after soaring 10% in April. They are 29.7% higher than a year ago.
Shelter or housing costs for the month rose 0.3% from 0.4%. They increased 2.2% from a year earlier. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.
"While transitory factors did a lot of the heavy lifting driving the May upside, the more persistent components like rents and OER firmed up as well much more than expected, pointing to a firmer source of foundation for the inflation data as the transitory factors begin to fall out of the figures," economists at Morgan Stanley said in a note reported by Bloomberg News.
The cost of health care declined 0.7% in May after two straight 0.1% monthly increases. Health care prices increased 0.9% year-over-year, for the smallest gain since the annual period ending March 1941.
In the headline annual figure, inflation in the United States surged 5.0% in the 12 months ended May, the largest increase since the annual period ending August 2008 and compared to 4.2% previously.
Core inflation increased 3.8% over the past 12 months, the biggest 12-month gain since the same increase in June 1992 and against 3.0% previously. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.
The following table of key inflation figures is for the last seven months through May, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on June 10, 2021. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
November 2020 to May 2021 Consumer Prices – Gains & Losses in Percent
|November 2020||December 2020||January 2021||February 2021||March 2021||April 2021||May 2021||12 Month|
|Food at home||-0.2||0.3||-0.1||0.3||0.1||0.4||0.4||0.7|
|Food away from home||0.1||0.4||0.3||0.1||0.1||0.3||0.6||4.0|
|Gasoline (all types)||0.5||5.2||7.4||6.4||9.1||-1.4||-0.7||56.2|
|Utility (piped) gas service||3.0||-0.4||-0.4||1.6||2.5||2.4||1.7||13.5|
|All items less food, energy||0.2||.0||.0||0.1||0.3||0.9||0.7||3.8|
|Commodities less food, energy||.0||0.1||0.1||-0.2||0.1||2.0||1.8||6.5|
|Used cars and trucks||-1.4||-0.9||-0.9||-0.9||0.5||10.0||7.3||29.7|
|Services less energy||0.2||.0||.0||0.2||0.4||0.5||0.4||2.9|
The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for May and the latest annual period become public on July 13, 2021.
CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.