Inflation in America accelerated further during May, prices rising 8.6% year-on-year in the fastest increase since December 1981, the Bureau of Labor Statistics reported Friday.
These surging prices have led to workers taking another pay cut over the past month, as real wages when adjusted for inflation fell 0.6 percent in April, even though average hourly earnings rose 0.3 percent, according to a separate release from the BLS.
Morning Consult chief economist John Lear said :” It’s hard to look at May inflation data and not be disappointed.”
Some of the biggest increases came in airline ticket prices, which rose by 12.6% during the month, used cars and trucks by 1.8%, and dairy products by 2.9%.
Friday’s numbers raised hopes that inflation may have peaked and heightened fears that the US economy is approaching recession.
The inflation report comes as the Federal Reserve is in the early stages of a campaign to raise interest rates to slow growth and lower rates.
May report is likely to boost the possibility of multiple rate hikes of 50 basis points in the future.
Inflation has been a political concern for the White House and President Joe Biden, with administration officials blaming the surge on supply chain issues related to the coronavirus pandemic, disruptions from huge demand for goods over services and the Russian attack on Ukraine.
However, Biden and Treasury Secretary Janet Yellen have stressed that much of the responsibility for lowering inflation lies with the Federal Reserve, and the administration has largely denied that trillions of dollars in aid for Covid played a major role.
