Finance

US Consumer Prices Reaccelerate In May, Highest Since 1981

US Consumer Prices Reaccelerate In May, Highest Since 1981

Having briefly slowed its inexorable rise in April – offering reawakened hope for the ‘transitory’ or ‘peak’ inflation camp – consumer prices were expected to continue accelerated in May (as energy costs soared). Consumer prices rose by a far larger than expected 1.0% MoM (significantly higher than the +0.3% MoM in April and the +0.7% Exp). That sent the YoY CPI to +8.6% – a new cycle high…

Source: Bloomberg

Headline CPI pushed to its highest since 1981 and has now risen for 24 straight months.

Core CPI offered no respite as it soars 6.0% YoY (worse than the +5.9% YoY exp)

Source: Bloomberg

Breaking down the sources of the shift in May, energy costs dominated the rise (the energy index rose 34.6 percent over the last year, the largest 12-month increase since the period ending September 2005)…

Source: Bloomberg

The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for medical care, household furnishings and operations, recreation, and apparel also increased in May.

The costs of putting a roof over your head is accelerating dramatically…

  • Shelter Inflation May 5.45%, up from 5.14% in April and the highest since 1991

  • Rent Inflation 5.22%, up from 4.82% in April and the highest on record

While the surge in goods costs is slowing, the costs of services are accelerating, no at their fastest pace sine 1991…

Source: Bloomberg

So, is this enough to force The Fed to falter? And will traders ‘buy the news’ anyway?

Finally, remember, always trust the officials…

This is bad news for the Fed, and definitely bad news for the White House.

Tyler Durden
Fri, 06/10/2022 – 08:38

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