The Consumer Price Index (CPI) went up by 8.6 percent in May, the highest year-over-year increase since December 1981, the Bureau of Labor Statistics revealed on Friday.
The increase was higher than the 8.3 percent increase projected by economists. Core CPI, excluding volatile energy and food prices, increased by six percent year-over-year.
The CPI increased by 1 percent in May alone, with core CPI rising 0.6 percent over the same period.
Price increases were recorded in “shelter, gasoline, and food,” the BLS said. Gas prices hit a new record on Friday with the national average reaching $4.986 per gallon, according to AAA.
The CPI previously hit a four-decade high of 8.5 percent year-over-year in March; prices increased by 1.2 percent in March 2022 alone.
Treasury Secretary Janet Yellen acknowledged on Tuesday that the U.S. faces “unacceptable” inflation levels.
“We currently face macroeconomic challenges, including unacceptable levels of inflation, as well as the headwinds associated with the disruptions caused by the pandemic’s effect on supply chains, and the effects of supply side disturbances to oil and food markets resulting from Russia’s war in Ukraine,” Yellen said at a Senate Finance Committee hearing.
The Congressional Budget Office projected in a report in late May that inflation will continue into 2023, but at a decreasing rate over the course of this year.
“In CBO’s projections, elevated inflation persists in 2022 because of the combination of strong demand and restrained supply in the markets for goods, services, and labor,” CBO director Phillip L. Swagel said in a statement. “In response, the Federal Reserve tightens monetary policy, and interest rates rise rapidly.”