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HomeUncategorizedUS inflation hits 40-year high because of gas prices

US inflation hits 40-year high because of gas prices

In May, US inflation hit its highest level since 1981, mainly due to a nearly 50% increase in gasoline prices year-on-year.

The US Department of Labor today announced that the US consumer price index (CPI) increased by 8.6% in May compared to last year. Core CPI (excluding food and fuel prices) increased by 6%. Both indexes are higher than April and also the highest since 1981.

Fuel prices increased by 34.6% year-on-year, mainly due to a nearly 50% increase in gasoline prices in the past year. The average price of gasoline in the US is currently around $4.99 a gallon. This price has set a record 31 times in the past 32 days. Therefore, June CPI (announced next month) may record a spike in gasoline prices.

In addition to gasoline prices, the US CPI increased due to food prices. Food prices rose 10.1% – the first double-digit increase since 1981. The Housing Index, which tracks the cost of rent and other accommodation-related costs, also rose 5.5. % – highest since 1991.

This data has extinguished expectations of peaking inflation and will add pressure on the US Federal Reserve (Fed). However, if the interest rate increases too quickly and sharply, this agency will push the US into a recession. This is a risk that has been constantly warned recently. Some economists think the US will be in a recession next year.

“The Fed will probably raise the key rate by 0.5 percent next week. However, that number could easily increase if inflation continues,” said Sal Guatieri, senior economist at BMO Capital Markets. peaking”.

Ha Thu (according to CNN, Bloomberg)

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