WASHINGTON: Consumer inflation in the United States increased by 8.6% in May compared to the same month a year ago, indicating that inflation is still high despite the Federal Reserve's rate hikes, US Labor Department reported.
According to the Department of Labor's Bureau of Labor Statistics, the consumer price index (CPI) increased 1% in May after climbing 0.3 percent in April (BLS). The May CPI increased by 8.6% from 2021, a higher increase than the 8.3% increase in April, and the third consecutive month of inflation above 8%. The figure for March was 8.5 percent. The CPI increase in May was the biggest in a 12-month period since December 1981. Since October 2021, the headline CPI has been above 6% year-on-year. Although price rise has begun to moderate, the latest data serves as a harsh reminder that the Fed still has a long way to go in bringing high inflation under control.
The Federal Reserve boosted its target federal funds rate by a quarter percentage point from near zero in March, signalling the start of a tightening cycle aimed at containing rising inflation. The Federal Reserve raised interest rates by half a percentage point in May and has promised further half-point hikes in the future, fueling recession fears.
The core CPI, which excludes food and energy, increased by 0.6% in May, following a 0.6% increase in April. Core CPI increased by 6% in the last year, following a 6.2 percent increase in April.
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