Consumer prices surge by most since August 2008

U.S. consumer prices increased in May at the fastest annual rate in nearly 13 years.

The Labor Department said Thursday that the consumer price index in May rose 5% year over year, hotter than the 4.7% increase that was anticipated. The reading was above last month’s 4.2% print.

Prices jumped 0.6% month over month, quicker than the 0.4% increase that was expected by analysts surveyed by Refinitiv.

The annual data has a “base effects” skew due to the decline in prices that occurred at the start of the pandemic.

Used car and truck prices surged 7.3%, accounting for about one-third of the index’s gain. Food prices, meanwhile, rose 0.4% matching April’s increase. Energy prices were unchanged from April as a decline in gasoline prices was offset by an increase in natural gas and electricity costs.

Core CPI, which excludes food and energy, in May rose 3.8% annually, making for the biggest increase since June 1992. Core prices increased 0.7% month over month, outpacing the 0.4% increase that was expected. The index rose 0.9% in April.