Consumer prices in the United States have risen 5% in the last year, the largest increase since 2008.
Consumers in the United States saw another price increase in May, with a.6% increase over April and a 5% increase over the previous year, the largest increase since 2008.
The jump in consumer prices in May, as published by the Labor Department on Thursday, reflected an increasing demand for a variety of products and services as people buy, travel, dine out, and attend events in a quickly recovering economy.
Prices have risen due to a lack of lumber, steel, chemicals, and semiconductors, which supply important products such as cars and computer equipment. Demand has moved to services like airline flights, restaurant meals, and hotel prices as consumers leave home after more than a year confined indoors, driving inflation in those areas as well.
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Core inflation, which excludes volatile energy and food expenses, jumped 0.7 percent in May after an even higher 0.9 percent gain in April, according to the government’s data, and has grown 3.8 percent over the last year. Since 1992, this is the largest 12-month increase in core inflation. It also exceeds the Federal Reserve’s aim of 2% yearly price rises.
Prices for used vehicles, which had already increased by a record 10% in April, increased by another 7.3 percent in May, accounting for one-third of the overall price increase. New automobile prices also increased by 1.6 percent, the most in a single month since 2009.
The increase in new and used vehicle pricing is due to supply chain issues that have resulted in a semiconductor shortage. Because of a shortage of computer chips, new car production has been curtailed, reducing the supply of old cars. Prices have grown in tandem with increased demand for automobiles.
In May, however, higher prices were visible in a wide range of categories, including domestic furnishings, which jumped 0.9 percent, owing to a new high in the price of floor coverings. Airline fares rose 7 percent after having increased 10.2 percent in April. Food prices rose 0.4 percent, with beef prices jumping 2.3 percent. Energy costs, though unchanged in May, are still up 56.2 percent in the past year.
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