Those rising costs squeezing your wallet at the gas station and grocery store just won’t quit.
US inflation hit a new 40-year high in May, according to data released Friday by the Bureau of Labor Statistics. The consumer price index (CPI), which measures the prices for a wide range of goods and services, rose 8.6% for the month from a year earlier. That’s the fastest 12-month increase since 1981 — and the fourth time inflation has notched a 40-year record this year.
The acceleration in prices puts even more pressure on the Federal Reserve, the central bank responsible for regulating the country’s monetary policy, which has been battling rising costs by hiking interest rates. Investors may be spooked, but the move will hopefully help tamp down your bills.
And, yes, people are worried.
In a Pew Research Center poll conducted between April and May, 93% of Americans named inflation as a “very big problem” or a “moderately big problem,” edging out issues like health care affordability, gun violence and climate change. In May, President Joe Biden called inflation the country’s “top economic challenge,” and just a few days later, Treasury Secretary Janet Yellen admitted that she was “wrong” about how long high inflation would last. (Last year, both Biden and Yellen had insisted inflation was “transitory,” which means temporary.)
Wondering where inflation is hitting hardest? According to Friday’s report, here are five of the largest recent contributors to the increase in inflation.
You’re not the only one getting stressed out by high costs in the grocery store aisle. Food prices increased 1.2% in May.
Dairy products were hit hard, with prices 2.9% — the category’s biggest monthly increase since July 2007. Meanwhile, non-alcoholic beverages prices increased 1.7%, and cereals and bakery products prices rose 1.5%. The cost of meats, poultry, fish and eggs jumped 1.1%. The cost of eggs alone jumped 5%, mostly due to an outbreak of avian flu plaguing poultry farms in the US
The cost of eating out rose 0.7% in May.
After spending much of 2020 and 2021 in COVID-19 lockdowns, travelers are getting back out there… only to find that the cost of flying has jumped. Airline fares kept rising in May, up 12.6% after jumping 18.6% the prior month thanks to the soaring cost of jet fuel.
Don’t expect any relief at the gas pump. The price of gas rose 4.1% in May after declining in April. The cost of natural gas rose 8% in May — its largest monthly increase since October 2005.
Of course, if you’ve been on the road lately, you’re well aware of Spiking gas prices. The national average passed the $5-per-gallon mark this week, according to Gas Buddy, as the ongoing conflict between Russia and Ukraine, limited capacity at oil refineries and consumer demand continued to push up prices. Although gas prices vary by state, there are some places where gas now costs more than the US minimum wage.
The cost of electricity, meanwhile, jumped 1.3%.
The cost of shelter, a category that includes housing prices and focused significantly on rent, increased 0.6% in May. That’s the largest monthly increase since March 2004, according to the BLS. The cost of shelter is now 5.5% higher than it was a year ago.
Across the country, renters have been dealing with rising prices amid a red-hot housing market that has potential homebuyers rethinking their strategies and turning to therapy to cope.
Buying a car — whether it’s used and new — is also getting more expensive.
The cost of used cars and trucks increased 1.8% in May after declining in each of the three prior months. The price of new vehicles jumped 1% in May, in part due to a continued chip shortage and supply chain issues.
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