U.S. consumer prices likely continued to rise rapidly in May as the economic recovery picked up, reflecting a surge in demand along with shortages of labor and materials.
Economists surveyed by The Wall Street Journal estimate that the Labor Department will report that the consumer-price index increased by 4.7% in May from a year earlier, up from 4.2% for the year ended in April. That would be the highest 12-month inflation rate since 2008. The core-price index, which excludes the often-volatile categories of food and energy, likely rose 3.5% in May from a year before, they estimated.
They also projected that the index rose a seasonally adjusted 0.5% in May from April. The index measures what consumers pay for goods and services, including clothes, groceries, restaurant meals, recreational activities and vehicles.
The annual inflation measurements are being boosted by comparisons with figures from last year during Covid-19 lockdowns, when prices plummeted because of collapsing demand for many goods and services. This so-called base effect is expected to push up inflation readings significantly in May and June, dwindling into the fall.
Compared with two years ago, overall prices rose a more muted 2.2% in April. Overall prices, however, jumped at a 7.2% annualized rate in the three months ended in April.
