Global| Jun 10 2022U.S. Consumer Price Inflation Accelerates in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Energy & food prices surge.
- Core price gain remains strong.
- Core goods prices & services prices both strengthen.
Retail pricing power heated up in May. The Consumer Price Index rose 1.0% last month following a 0.3% April increase. The 8.6% y/y gain was the strongest since December 1981. A 0.8% May rise had been expected in the Action Economics Forecast Survey.
Prices excluding food & energy remained strong, and rose 0.6% in May for the second consecutive month. The 6.0% y/y gain was below the March peak but remained up from a recent low of 1.3% y/y set in February 2021. A 0.5% May increase had been expected.
Energy prices led the price pick-up last month with a 3.9% rebound (34.6% y/y) after a 2.7% decline during April. Gasoline prices rose 4.1% (48.7% y/y) after falling 6.1% while fuel oil prices surged 16.9% (106.7% y/y). Natural gas prices strengthened 8.0% (30.2 % y/y) and the cost of electricity rose 1.3% (12.0% y/y).
Food pricing gained momentum last month. Prices rose 1.2% (10.1% y/y) after increasing 0.9% in the prior month. Dairy product prices surged 2.9% (11.8% y/y) and meat, poultry, fish & egg prices rose 1.1% (14.2% y/y). Cereal & bakery product prices also were strong and increased 1.5% (11.6% y/y). Fruit & vegetable prices improved 0.6% (8.2% y/y).
Services prices rose 0.6% (5.2% y/y) in May, roughly the same as in each of the prior three months. The cost of public transportation strengthened 8.6% (26.3% y/y). Shelter costs increased 0.6% (5.5% y/y). The owners' equivalent rent of primary residences gained 0.6% (5.1% y/y) and rents of primary residences rose 0.6% (5.2% y/y). The cost of medical care services increased 0.4% (4.0% y/y). Recreation services prices gained 0.5% (4.9 % y/y) while education prices edged 0.2% higher (1.7% y/y).
Goods prices excluding food & energy rose 0.7% (8.5% y/y) in May after a 0.2% April gain. Price changes within categories were mixed. Used car & truck prices strengthened 1.8% (16.1% y/y) and new vehicle prices rose 1.0% (12.6% y/y). Apparel prices rose 0.7% (5.0% y/y) as recreation product prices gained 0.1% (3.8% y/y). Home furnishings prices also rose 0.1% (9.7% y/y). Working lower, education & communication product prices fell 1.7% (-6.0% y/y) and household appliance prices weakened 0.7% (+6.4% y/y).
The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
