US Inflation Posts Biggest Monthly Increase in 2023 as CPI Rises 0.6%
United States inflation jumped in May, posting its biggest monthly increase in 2023. According to the Labor Department, the Consumer Price Index rose 0.6% last month, marking the highest one-month increase since February of 2023. The increase came as energy prices surged driven by rising demand and higher crude oil prices. In addition, higher housing costs and higher prices for apparel, transportation services, recreation, and personal care items also contributed to the increase.
The CPI rose 5.0% over the last 12 months, its largest advance since 2008. The rise in consumer prices was well above the economists’ estimates of 0.4%. Core CPI, which excludes volatile food and energy prices, increased 0.8%. The unadjusted year-over-year gain of 4.5% was the highest since March of 2011.
The surge in inflation has caused some economists to worry about an increase in inflationary pressure. With the U.S. economy gradually reopening in recent weeks, stronger demand could lead to further increases in prices. To address rising inflation, the Federal Reserve has indicated that it will allow inflation to temporarily get above its 2% target as the economy continues to recover.