Consumer prices rose last month by 5% compared to May of 2020, marking the biggest year-over-year gain since August 2008, according to Consumer Price Index data released this morning. Prices were 0.6% higher in May than they were in April.
Why it matters: April’s CPI reading intensified concerns that inflation is heating up and will be hard to contain. Today’s data could stoke those fears further and contribute to a self-fulfilling cycle of rising prices.
Zoom in: Used vehicle prices increased 7.3% month-over-month in May, on the heels of a 10% monthly gain in April. Since a year ago, used vehicles are 29.7% more expensive.
Yes, but: Used car prices are currently the poster child for supply chain bottlenecks, and may not be indicative of longer-term inflation trends.
By the numbers:
- Food prices rose 0.4% in May, after a 0.4% gain in April. They're 2.2% higher than a year ago.
- Energy costs are 28.5% higher over the last 12 months.
- Apparel has gone up 5.6% since this time last year.
- Medical care commodities was the only category that saw a decrease from a year ago, dropping 1.9%.
Context: In April, the CPI reading showed 4.2% growth over the prior year, and 0.8% growth over the prior month.
- The White House on Wednesday got out in front of the expected jump in prices, making its case that the current uptick will be a short-term phenomenon, Axios' Hans Nichols reported.
- May's reading was slightly higher than economists' consensus estimates for a 0.4% month-over-month increase and a 4.7% jump from a year ago.
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