Inflation hit a more than 40-year high in May, shattering speculation that it had peaked in March.
The consumer price index increased 8.6 percent over the last 12 months, the U.S. Bureau of Labor Statistics announced on Friday.
It was the largest 12-month increase in the CPI since December 1981.
“The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors,” the BLS said.
It said food prices “increased 10.1 percent for the 12-months ending May, the first increase of 10 percent or more since the period ending March 1981.”
Trending:
The CPI was 8.5 percent in March. When it dipped to 8.3 percent in April, economists suggested the peak of inflation might have been passed.
In fact, economists surveyed by The Wall Street Journal were expecting another 8.3 percent figure, the outlet reported.
That didn’t happen. As The New York Times noted on Friday, “Fed officials are watching for signs that inflation is cooling on a monthly basis as they try to guide price increases back down to their goal, but Friday’s report offered more reason for worry than comfort.”
The Federal Reserve has said it will raise interest rates to cool inflation, but the action carries the risk of cooling the economy too much and triggering a recession.
So Democrats scheduled a primetime Congressional hearing into January 6th, a riot that happened 18 months ago that almost no one cares about, the night before inflation data is going to be released that shows we are still at a 40 year inflation high. Talk about tone deaf. Wow.
— Clay Travis (@ClayTravis) June 9, 2022
The worries walloped Wall Street, as Dow Jones futures fell 464 points, about 1.5 percent, after the CPI figures were released. The S&P 500 fell 1.4 percent and the Nasdaq 100 futures dropped 1.7 percent, according to CNBC.
Commentators said optimism about the economy is in short supply.
“It’s confirming some of the fears I’ve been hearing from investors this week,” said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.
“I think there’s still a pretty high degree of pessimism that helps underpin the market, and the back-and-forth action is really the market trying to make sense of the next direction and waiting for news flow,” Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said.
Inflation is a national crisis.
The most financially vulnerable people in society are getting decimated, while politicians, central bankers, and the media told them not to worry.
This is unsustainable for the average American family.
— Pomp ? (@APompliano) June 10, 2022
While the May inflation was driven largely by gasoline prices and food prices, what economists call the core CPI, which eliminates those volatile items, logged a 6 percent increase, which was well above forecasts, according to Bloomberg.
The outlet offered this bottom line: “The figures dash any hope that inflation had already peaked and was starting to simmer down.”
Republican Rep. Kevin Herd of Oklahoma on Friday said President Joe Biden has failed.
“The American people don’t believe that inflation is only 8 percent,” Herd said, according to Fox Business.
“Everything is up double digits, gas has doubled already,” the congressman said.
Has President Biden done enough to fight inflation?
“The president’s doing all these gimmicks like releasing a million barrels a day, oil that we put in the Strategic Petroleum Reserve at $50 a barrel, and they’ll have to replace about $150 a barrel. Just economic disaster after disaster,” he said.
Republican Sen. John Kennedy of Louisiana said inflation is “destroying the American dream,” according to Fox News.
“We have to address it and it looks to me like the Biden administration has just given up. … I’m not saying this about the Treasury secretary [Janet Yellen] specifically but when is President Biden gonna start firing people?” he said.
