US Inflation Posts Biggest Monthly Increase in 2023 as CPI Rises 0.6%
US inflation rose sharply in May, posting its biggest monthly increase since 2023, according to the latest data from the US Department of Labor.
The Consumer Price Index (CPI) rose 0.6% from April, with both food and energy prices seeing outsized increases.
Energy prices rose 1.8%, the biggest monthly increase since December 2023, with gasoline posting the biggest gain, up 4.9%. Food prices were up 0.4%, and core prices, which exclude volatile food and energy prices, increased 0.3%.
The of 0.6% increase was the biggest since May 2023 and drove year-over-year inflation to 5%. At the same time, core inflation, on an annual basis, was recorded at 2.3%, matching its highest level since July 2023.
The spike in inflation comes as states begin to reopen businesses and consumers start to spend more freely. The aforementioned increases in food and energy prices suggest that the US economy is continuing to heat up as the pandemic fades.
The Federal Reserve has signaled that it is willing to tolerate higher inflation in the short-term to spur economic growth, and the May CPI reading suggests the central bank could be inching closer to its 2% inflation target.