The U.S. Consumer Price Index (CPI) surged 5 percent year over year in May, the fastest pace since August 2008 and higher than Wall Street expectations, according to reports on Thursday (June 10).
Prices increased in May at the fastest annual rate in nearly 13 years as the U.S. economy started bouncing back from pandemic restrictions and lockdowns, the Bureau of Labor Statistics said in its report.
The medical care index dropped 0.1 percent in May after going up in the past four months, per the report. The index for prescription drugs went down 0.3 percent in May after going up 0.5 percent in April. The hospital services index rose 0.2 percent, while the physicians’ services index was unchanged.
The increase in the CPI in May was more than the 4.7 percent uptick that in April, with prices going up 0.6 percent month over month, and faster than the 0.4 percent jump anticipated by analysts surveyed by Refinitiv, CNBC reported.
Used car and truck prices were up 7.3 percent, which was roughly one-third of the CPI’s gain. Food prices increased 0.4 percent, the same as in April. Energy prices were also unchanged from April.
The hike in prices has retailers scrambling to offset the increases and looking for new ways to pass along the new expenses since eCommerce has made retail price comparisons easy.
The pricing transparency also tends to be biased and favors the strongest players and brands. The Institute for Supply Management said in April its latest survey indicated that some 40 percent of manufacturers have low inventories.
The National Retail Federation (NRF) said retail sales in 2021 are likely to grow between 10.5 percent and 13.5 percent, totaling over $4.44 trillion this year. In February, the NRF was forecasting a projected 6.5 percent increase.
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