US: CPI inflation accelerates to 4.2% in May on high energy prices
New York, June 10
,: The US consumer inflation rose 4.2 per cent annually in May as higher energy prices led to the CPI index increasing at its fastest pace in three years. The CPI had advanced 3.8 per cent year-on-year in April. On a monthly basis, prices were up 0.5% in May after climbing 0.6% in April.
The core CPI rose 2.9 per cent year-on-year in May after increasing 2.8 per cent in April. The so-called core CPI gained 0.2 per cent on a monthly basis after rising 0.4 per cent in April. Core CPI measures inflation pressure excluding volatile food and energy prices.
The energy index increased 23.5 per cent for the 12 months ending May. The food index increased 3.1 per cent over the last year, according to the data released by the Labour Department's Bureau of Labour Statistics.
The third straight month of price rise will make newly-appointed US Federal Reserve chairman Kevin Warsh's task difficult as he heads into his maiden policy meeting on June 16-17.
Experts have already pared bets of a cut this year after May's strong jobs report. With inflation coming in hot in May, an interest rate hike for this year cannot be ruled out. The US Federal Reserve tracks the Personal Consumption Expenditures Price Index, which is also running above the target of 2 per cent.
Higher energy prices are reflected in soaring pump prices for US households who are grappling with strained income and rising prices. The US consumer sentiment fell to a record low in May as consumers started dipping into their savings to meet their household expenditure.
The higher inflation print is a worry for US President Donald Trump, who is seeking to retain control of Congress in the mid-term elections.
The prolonged closure of the critical Strait of Hormuz doesn't augur well for the inflation trajectory, even as hopes fade of a durable peace deal between the US and Iran.
Tension ratcheted up in the region after the US and the Iranian regime exchanged a fresh round of strikes. The US targeted military bases in Iran along the Strait of Hormuz after Iran downed an American Apache helicopter.
— ANI
Reader Comments
It's interesting how global events like Strait of Hormuz tensions directly impact our daily lives here in the US. The Fed has a tough job ahead. Hope they find the right balance.
Inflation is a global problem now. India should learn from this - we can't rely too much on imported energy. Time to push renewables like solar and wind. Modi ji ka focus on green energy is spot on.
Trump ne socha tha economy sambhal legi lekin ab inflation bhi badh gaya. Midterms mushkil ho sakte hain unke liye. Waise bhi America mein aam aadmi petrol ke bhaav se pareshan hai.
The core CPI at 2.9% is still concerning. Could the Fed actually hike rates this year? That would be a shocker. Warsh has a tough decision to make at his first meeting.
Strait of Hormuz tension ka asar pura desh feel kar raha hai. Iran aur US ka jhagda hum jaise middle-class families ko direct impact karta hai. Kya zaroorat hai itni ladai ki? Diplomacy hi best hai.
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