It’s clear that the realities many Americans face are vastly different from some of the economic indicators on paper. The burden of record-high inflation has continued to push the limits for people across the country.
The costs of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs.
Consumer prices surged 8.6% last month from 12 months earlier, faster than April’s year-over-year surge of 8.3%, the Labor Department said Friday.
The new inflation figure, the biggest yearly increase since December 1981, will heighten pressure on the Federal Reserve to continue raising interest rates aggressively.
Some evidence in recent weeks had suggested that inflation might be moderating, particularly for long-lasting goods that were caught up in supply chain snarls and shortages last year.
But that trend appeared to reverse itself in May, with used car prices rising 1.8% after having dropped for three straight months.
New car prices also rose, a consequence of auto production remaining hamstrung by shortages of semiconductors. And clothing prices increases after having declined in April.
The increase in the core rate over the past year slowed to 6% from 6.2%, however.
The Federal Reserve views the core rate as a more accurate measure of price trends, but the higher cost of gas and food have generated much of the public and political outcry about inflation.
Rising food and energy prices also add to the costs of doing business for many companies ranging from grocers and restaurants to airlines and fertilizer producers. And they’re passing those costs onto consumers.
Gasoline prices surged the most, rising 48.7 percent from last year, up 7.8 percent in just one month. A gallon of gasoline cost a record average of $5.01 as of Sunday.
In many of the country’s most populous metro areas, the price is significantly higher, averaging nearly $6.50 in Los Angeles, close to $6.00 in the Chicago region and approximately $5.60 in Phoenix, Arizona.
A substantial portion of workers’ paychecks is being eaten up simply to pay to get to work. In the US, it is not uncommon for workers to commute 50 miles or more roundtrip, refueling multiple times a week.
One day’s work on a $15 an hour wage will now not even cover filling up a tank of gas in many trucks and larger vehicles, the cost of which can easily exceed $100.
Energy costs, including gasoline, surged in May rising a staggering 34 percent year over year. The next highest price rise was in groceries, which rose 11.9 percent over last year. Both items are core essentials.
The price surge has become the source of continuous discussions in households, at gas pumps and in supermarket checkout lines as families struggle to meet daily household expenses.
The 11.9 percent rise in food prices was the highest increase since 1979 during the administration of Jimmy Carter.
Prices of meat, baked goods, cereals, dairy products and eggs all increased at double digit rates. Eggs soared 5 percent in May alone and are up more than 32 percent from a year ago.
The US Department of Agriculture has estimated that the price of eggs received at the farm will rise 75 percent this year, translating to consumers paying 19.5 to 20.5 percent more in the store.