US Inflation Rate at Over 6-Year High

The inflation rate in the US increased to 2.8 percent in May of 2018 from 2.5 percent in April, beating market forecasts of 2.7 percent. It is the highest inflation rate since February of 2012, mainly due to rising prices for gasoline and shelter.

Year-on-year, prices rose faster for fuel oil (25.3 percent from 22.6 percent in April); gasoline (21.8 percent from 13.4 percent); shelter (3.5 percent compared to 3.4 percent); medical care services (2.3 percent from 2.2 percent); apparel (1.4 percent from 0.8 percent); and medical care commodities (2.7 percent from 1.9 percent). 

On the other hand, inflation eased for food (1.2 percent from 1.4 percent); electricity (1 compared to 1.2 percent); and transportation services (3.8 percent from 4.1 percent). Also, prices fell for utility piped gas service (-0.8 percent from +1 percent); used cars and trucks (-1.7 percent from -0.9 percent) and new vehicles (-1.1 percent from -1.6 percent). Core inflation which excludes food and energy eded up to 2.2 percent from 2.1 percent.

On a monthly basis, consumer prices rose 0.2 percent, the same as in April and in line with expectations. The indexes for gasoline and shelter made the largest upward contributions: the gasoline index increased 1.7 percent, more than offsetting declines in some of the other energy component indexes and led to a 0.9 percent rise in the energy index. The medical care index rose 0.2 percent. The food index was unchanged over the month.

Excluding food and energy, prices also rose 0.2 percent in May, higher than 0.1 percent in April and in line with forecasts. The shelter index rose 0.3 percent in May. The indexes for new vehicles, education and communication, and tobacco increased in May, while the indexes for household furnishing and operations, and used cars and trucks fell. The indexes for apparel, recreation, and personal care were unchanged.

US Inflation Rate at Over 6-Year High

BLS | Joana Taborda |
6/12/2018 12:54:50 PM