Consumer Prices Rise 5% Since May 2020 Despite Slower Monthly Inflation

Headline Roundup June 10th, 2021

The Bureau of Labor Statistics reported Thursday that consumer prices increased 5% in the 12-month period ending in May, higher than April’s 4.2% yearly increase, despite monthly inflation slowing from 0.8% in April to 0.6% in May. Core inflation, which excludes volatile food and energy prices, rose 3.8% in the highest yearly increase since June 1992. This outpaced experts’ expectations, which anticipated 3.5% core inflation and 4.7% overall inflation. The new data is partly explained by the "base effect" of unusually low inflation in May 2020. Additionally, a third of May’s price increase came from a 7.3% monthly increase in used car and truck prices, down from a 10% increase the previous month. The April inflation report spurred a 680-point drop in the Dow Jones Industrial Average, but Wall Street approached record highs on Thursday following the latest report. 

Coverage in center- and left-rated outlets was more trusting of many economists’ belief that the high inflation was temporary, sometimes quoting market experts who called the inflation “transitory.” Coverage in some right-rated outlets was skeptical of that narrative. 

Consumer Prices Rise 5% Since May 2020 Despite Slower Monthly Inflation

From the Left
302

Consumer prices roared higher last month, rising at their fastest pace in decades.

Inflation rose 5% in the 12-months ending in May, the Bureau of Labor Statistics reported Thursday. That marked the biggest jump since August 2008.

Stripping out food and energy costs, which tend to be more volatile, inflation stood at 3.8% over that 12- month period. It was the biggest 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...

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From the Center
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ANALYSIS

Consumer prices jumped more than expected in May, but the surge in inflation looks to be temporary and should not push the Federal Reserve to tighten policy for now.

The consumer price index rose 5% in May on a year-over-year basis, the highest since the summer of 2008, when oil prices were skyrocketing. Excluding food and energy, core CPI rose 3.8% year over year, the highest pace since 1992. A third of the increase was attributed to a sharp 7.3% increase in used car and truck prices.

Fed officials have described...

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From the Right
302
ANALYSIS

A key inflation gauge that revealed consumer prices rose at their fastest pace in decades last month could prompt the Federal Reserve to start laying the groundwork to begin curtailing its massive monetary support to the U.S. economy.

The Labor Department announced Thursday that the Consumer Price Index (CPI) surged 5% in May from a year prior, the fastest year-over-year jump since 2008. Excluding the volatile food and energy data, core inflation rose 3.8% from a year earlier, the quickest since June 1992. 

The data could have significant implications for the U.S. Central...

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