Considering the cost of food and energy, which tends to be more volatile. Inflation was 3.8% during those 12 months, the highest increase known as core inflation since June 1992.
Although May’s price rose faster than economists had expected. But it should come as no surprise to Cailin Birch, a global economist at The Economist Intelligence Unit.
“The Consumer Price Index hit its lowest point during the coronavirus crisis in the same month last year. This, combined with recent price growth has been strong in some areas. This means that year-over-year inflation numbers are inevitably large. she said in an emailed comment.
She expects inflation to return to a range of 2% to 3% in the second half of the year.
The used car market is on fire as the perfect storm of low interest rates. Car rental is limited. Global chip shortage and people returning to work who did not want to use public transport due to the pandemic. New car prices also rose in May, up 1.6 percent.
Although the May price index increase was driven by only a few categories. But inflationary pressures are evident throughout the report.
For example, household appliances airline fare and the cost of clothing increased rapidly. The furnishings recorded the largest monthly increase since January 1976.
Andrew Hunter, senior US economist at Capital Economics, said: “The severe labor shortage (And resulting in higher wage pressures) the leisure and hospitality sectors are experiencing now.”
Energy prices, which contributed to the sharp increase in the previous month, were flat in May, with lower oil prices and other energy items rising.