US Consumer Prices Index rises solidly in May as inflation spikes to 13-year peak



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US Consumer Prices Index rises solidly in May as inflation spikes to 13-year peak

In context of a robust reopening of US economy coupled with a modest recovery in labour markets despite a supply restrain, the US Consumer Prices Index (CPI) that tracks the changes in prices of goods and services which consumers are laying off on an adjusted basis, rose solidly in May following a 0.8 per cent increase in April, as US inflation based on CPI had witnessed its biggest annual increase in roughly 13 years, US Commerce Department said in a report.

In point of fact, a sharp shoot-up in US inflation indicators came forth as a vigorous reopening of US economy alongside massive Government stimulus had been buoying up domestic demands, while a global-scale semiconductor shortage appeared to have stemmed a rapid uptick in the prices of used motor vehicles, which in effect had led the charges in US Consumer Prices Index last month.

Aside from a stronger-than-anticipated reopening of a roaring US economy, a flurry of fundamentals such as an acceleration in vaccination push, a record-low interest rate, a shortage of raw materials alongside trillions of Dollars in pandemic stimulus from a Biden Administration, seemed to have fuelled up prices on all sectors but gasolines including a beleaguered travel and entertainment sector, too.

US Consumer Prices rise in May, inflation perks up

In tandem, according to US Commerce Department data released earlier in the day, US Consumer Prices Index rose 0.6 per cent in May after gaining 0.8 per cent a month earlier, which had been the largest gain since June 2009, with food prices soaring as much as 0.4 per cent, while over the past twelve months through May, US CPI had accelerated 5.0 per cent, marking up the largest year-on-year rise since the August of 2008.

Meanwhile, addressing to a torrential high-tide in US inflation which would likely to grab US Fed’s attention, a senior investment strategist for Allianz Investment Management, Charlie Ripley said, “Figures like today's CPI will certainly be raising eyebrows at the Fed, but the bottom line is they will likely need additional evidence to determine whether upward inflation pressures will be more persistent.