US inflation hits 40-year high of 8.6% as food, gas and shelter costs rise

theguardian.com:

Inflation rose to a four-decade high in the US in May, rising 8.6% from a year ago, the labor department said on Friday.

The latest consumer price index (CPI) figures showed that the cost of living increased 1% from April and was broad-based, with the indexes for shelter, gasoline and food being the largest contributors.

Gas prices have been soaring across the US, approaching $5 a gallon this week – $1.90 more than a year ago. According to the latest CPI report the energy index rose 3.9% over the month, with the gasoline index rising 4.1%. Other major component indexes also increased. The food index rose 1.2% in May as the food at home index increased 1.4%.

May’s rise was driven by sharp increases in energy costs, which rose 34.6% from a year earlier, and groceries, which jumped 11.9% on the year. Food and energy prices are more volatile than other categories included in the CPI, and the labor department publishes a “core prices” index which excludes them. It rose 0.6% from April.

Inflation fears have battered Joe Biden’s poll numbers and his administration has sought to blame Russia’s invasion of Ukraine for rising prices. The war in Ukraine and the continuing disruption to global trade caused by the coronavirus pandemic have both contributed to rising prices for food and energy. But there were worrying signs of inflation spreading. Shelter costs were up 5.5% compared with a year ago. After three months of declines, prices for used cars and trucks rose 1.8% in May from April and are up 16.1% over the year.

The yearly increase in inflation was up from the 8.3% increase in April and higher than economists had expected. Inflation is now running at a rate last seen in ​​December 1981. The Federal Reserve meets next week and is