Thanks, Fed Economists: Inflation Surges Yet Again as Real Wages Drop
The US Bureau of Labor Statistics released new Consumer Price Index data this morning, and it shows price inflation in May surged at the fastest rate since 1981. The overall CPI showed prices increased last month at a rate of 8.6 percent, year over year. That’s nearly a forty-one-year high—the highest since December 1981’s CPI surge of 8.9 percent.
Year-over-year CPI inflation growth had somewhat moderated in April, prompting some observers to suggest inflation had peaked. YOY growth fell to 8.3 percent in April, which was down from March’s growth rate of 8.5 percent. But, with May’s new multi-decade high, hopes of a past peak appear to primarily be based on wishful thinking.
Price surges spanned across many key categories of goods, including food, energy, and transportation. Food prices overall were up 10.1 percent year over year, while energy was up 34.6 percentvover the same period. Gasoline was up 48 percent.
Although auto-purchase prices have somewhat moderated in recent months, used cars and trucks were still up 16.1 percent over the period, and new vehicles were up 12.6 percent. Airline fares surged as well, rising 37.9 percent, year over year.
The new BLS data reinforces what has already been growing general sentiment over the cost of living. Gasoline prices have inflicted increasing pain on households in recent months, as CNN reports:
The US average for the price of a gallon of regular gas hit $4.99 according to the most recent reading from AAA Friday. It marked the 14th straight day, and the 31st time in the last 32 that gas has set a record in America. Gas prices have climbed 39 cents, or 8 percent, just in the two weeks since the start of the Memorial Day weekend kicked off the traditional summer driving season.
For much of the country, $5 gas is already here.
Meanwhile, rent is surging at cringe-inducing rates in many cities
Article from Mises Wire