Everything is going to cost more…
The Consumer Price Index (CPI), a measure of U.S. economic inflation, continued climbing quickly in May, surpassing economists’ expectations for another month.
CPI rose 0.6% in May, according to Department of Labor data released Thursday, bringing the annual CPI increase to 5%, well over the 4.7% predicted by economists interviewed by The Wall Street Journal. Core CPI, a measure of consumer good prices minus the more volatile indexes for food and energy, rose 0.7% in May after a 0.9% jump in April.
The jump in overall CPI is “the largest 12-month increase since a 5.4-percent increase for the period ending August 2008,” the Department of Labor reported. The index for core CPI “rose 3.8 percent over the last 12-months, the largest 12-month increase since the period ending June 1992.”
Experts are still unsure of when inflation may slow. Inflation rates are expected to stay high throughout the summer as demand returns after taking a long hiatus during the pandemic. Prices are also rising again after diving at the onset of the pandemic and widespread lockdowns last year. The return to normal pricing levels after the artificial drop is known as the base effect, and experts are still unsure of how much inflation is driven by the effect and how much is due to economic malaise driven by government policies.
Multi-trillion dollar aid packages as well as trillions of dollars more in loans from the Federal Reserve are expected to push prices high, however, as that money works its way into the U.S. economy, drastically expanding the money supply.