Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
The US Consumer Price Index (CPI) rose 0.6% in May, marking its largest monthly increase since February 2023. The increase in the CPI came as inflationary pressures increase following the recent stimulus packages passed by the Biden administration and central bank easing. Food prices rose 0.5%, while energy costs surged 3.5%, accounting for the majority of the rise. Prices rose for various goods and services like apparel, airfare, and medical care services.
The increase in inflation has raised concerns from some economists, who worry that high prices could pull back consumer spending and slow down economic growth. The Federal Reserve has said that it is currently targeting inflation to remain around 2%, but is willing to allow for higher levels of inflation given the current economic situation.
The May figures offer a glimpse into how vaccination rates and the reopening of the economy has impacted prices. The increased demand for some goods that had been held back due to covid-19 is starting to be felt in prices. The Bank of America even said that the May CPI could be the start of a period of rising prices, or an “inflationary inflection point” if prices continue to increase.
The rise in the CPI comes as the US economy is slowly recovering from the damages done by covid-19. Vaccination rates have been increasing in recent weeks, leading more states to reopen their economies. This, in turn, is leading to an increase in consumer spending and increased demand for goods and services, which could push prices higher.