U.S. consumer prices surged in May at the fastest annual rate since August 2008, the Labor Department announced on Thursday.
The consumer price index in May increased 5 percent year over year, higher than the 4.7 percent increase that was expected.
Prices saw a 0.6 percent increase month over month, also above the 0.4 percent increase that analysts surveyed by Refinitiv had predicted.
The annual data has a “base effects” skew caused by the drop in prices that occurred at the beginning of the coronavirus pandemic.
Used car and truck prices soared 7.3 percent, accounting for about one-third of the index’s rise. Food prices matched April’s increase at 0.4 percent. Energy prices remained the same from the month prior as a decline in gasoline prices was offset by a rise in natural gas and electricity costs.
The surge comes as the threat of inflation looms as numerous sectors of the economy face upward pressure on prices while businesses contend with supply chain bottlenecks caused by the pandemic. A number of businesses have also struggled to hire new workers as supplemental unemployment benefits have served as an incentive for workers to stay home.