US consumer prices rose 5% in May
U.S. consumer prices rose the most during May 2008 as concerns about inflation escalated.
According to the Bureau of Labor Statistics, consumer prices increased by 5% in May compared to the same month a year ago.
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This is the most significant increase since August 2008, with prices rising 5.4%, 0.8% higher than the price rise in April.
Pent-up demand in the US faces a shortage of products used in the manufacturing processes of major commodities, from wood and steel to chemicals and semiconductors.
Services such as restaurants and hotels have also seen an increase in inflation as consumers become increasingly adventurous outside their homes.
The Bureau of Labor Statistics said in its report that CORE CPI increased by 3.8% in May if volatile products such as food and energy are not considered.
The Fed has said many times that inflation levels are likely to be temporary.
This, along with the fact that prices were curtailed for some time, meant that the Fed had taken a more relaxed approach to inflation.
“We’re excited to announce that we’re a great opportunity to help you,” said Robert Alster, CIO at investment management firm Close Brothers Asset Management. As prices rise, economists are left with important questions. What is driving the surge in inflation?
“The reality is that there are many factors, from oil prices to wage growth. Everything is based on a surge in demand. What’s plentiful is that the Fed and policymakers around the world say this is the trend. We’re looking at US inflation over the next few months to see if it’s the case.”
“Anyway, we may hear calls for action from the administration’s Hawkish side to stop the rise in inflation. Whether we are listening to these calls and the monetary policy lever being pulled. I understand, but it depends on the data for the next few months.”
