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Prices in the US are rising at their fastest pace in decades

2021-06-11T05:33:45.857Z


Inflation rose 5% in the 12 months ending in May, the Bureau of Labor Statistics reported. FAO: Global Food Prices Rise 3:54 (CNN Business) - U.S. consumer prices rose sharply last month, hitting their fastest pace in decades. Inflation rose 5% in the 12 months ending in May, the Bureau of Labor Statistics reported Thursday. It means the largest increase since August 2008. If food and energy costs, which tend to be more volatile, are excluded, inflation stood at 3.8% during that 12-m


FAO: Global Food Prices Rise 3:54

(CNN Business) -

U.S. consumer prices rose sharply last month, hitting their fastest pace in decades.

Inflation rose 5% in the 12 months ending in May, the Bureau of Labor Statistics reported Thursday.

It means the largest increase since August 2008.

If food and energy costs, which tend to be more volatile, are excluded, inflation stood at 3.8% during that 12-month period.

It was the largest increase in so-called core inflation since June 1992.

In the month of May alone, prices rose 0.6% on a seasonally adjusted basis, slightly less than in April.

Core inflation, excluding food and energy prices, stood at 0.7%, compared to 0.9% in April.

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Although May's price increases came at a faster rate than economists had predicted, they weren't entirely surprising, according to Cailin Birch, a global economist at The Economist Intelligence Unit.

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“The consumer price index reached its lowest point during the coronavirus crisis in the same month last year.

This, combined with recent strong price growth in some specific areas, meant that the year-on-year inflation figure was inevitably going to be large, ”he said in emailed comments.

She expects inflation to fall back to the 2% to 3% range in the second half of the year.

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The root of higher prices

But supply chain problems and increased demand continue to drive prices up.

For example, used car and truck prices rose again sharply, by 7.3% in May and accounting for a third of the overall increase in May.

Over the past 12 months, price tags are up 29.7% without seasonal adjustments.

The used car market is on fire due to a perfect storm of low interest rates, a limited supply of rental cars, a global shortage of chips, and people returning to work unwilling to use public transportation due to the pandemic.

New car prices also rose in May, rising 1.6%.

Although the May price index increase was driven by only a few categories, inflationary pressures are visible throughout the report.

For example, the costs of home furnishings, airfare, and clothing rose rapidly.

Furniture posted its biggest monthly increase since January 1976.

Americans continue their return to restaurants as the economy reopens.

Prices in the "eating out" category rose 0.6%, the fastest pace since September.

Restaurant prices rise as companies pay their workers more as an incentive to get them back to work.

Despite the fact that millions of people remain unemployed as a result of the pandemic, companies report that they are struggling to find qualified personnel.

Several companies announced higher minimum wages to attract workers.

"The severe labor shortage (and consequent upward pressure on wages) in the hospitality and leisure sector is now being addressed," wrote Andrew Hunter, senior US economist at Capital Economics.

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Finally, rising input costs hit the consumer.

Campbell Soup announced Wednesday that its prices will increase due to higher costs in its supply chain.

Energy prices, which contributed a lot to the increases of the previous months, remained stable in May, with the fall in gasoline prices and the increase in other energy items.

Price increase Cars pandemic impact Inflation

Source: cnnespanol

All news articles on 2021-06-11

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