The costs of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs.
Consumer prices surged 8.6% last month from 12 months earlier, faster than April’s year-over-year surge of 8.3%, the Labor Department said Friday. The new inflation figure, the biggest yearly increase since December 1981, will heighten pressure on the Federal Reserve to continue raising interest rates aggressively.On a month-to-month basis, prices jumped 1% from April to May, much faster than the 0.3% increase from March to April.
New car prices also rose, a consequence of auto production remaining hamstrung by shortages of semiconductors. And clothing prices increases after having declined in April. Surveys show that Americans see high inflation as the nation’s top problem, and most disapprove of President Joe Biden’s handling of the economy. Congressional Republicans are hammering Democrats on the issue in the run-up to midterm elections this fall.
Harper, 43, said he and his fiancée are delaying marriage because they can’t afford it right now. They’ve cut off Netflix and Hulu. His car’s catalytic converter was stolen recently — an increasingly common theft — for the rare metals they contain that have shot up in price. A repair will cost $1,300.
Even so, rising gas prices are eroding the finances of millions of Americans. Prices at the pump are averaging nearly $5 a gallon nationally and edging closer to the inflation-adjusted record of about $5.40 reached in 2008.Research by the Bank of America Institute, which uses anonymous data from millions of their customers’ credit and debit card accounts, shows spending on gas eating up a larger share of consumers’ budgets and crowding out their ability to buy other items.
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