BLS Reports Inflation Continues to Rise

By:
Chris Gaetano
Published Date:
Jun 10, 2021
Inflation

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index, the general measure of inflation, rose by 0.6 percent in May after having already risen by 0.8 percent in April. The BLS noted that, over the last 12 months, the index has increased by 5 percent before seasonal adjustment, the largest increase since 2008's 5.4 percent.

While the prices of all items are increasing, the sharp spike in inflation seems to be led by a handful of sectors that have served to skew the average. The biggest source has been energy, which overall is 28.2 percent more expensive than it was 12 months ago; this increase, in turn, has been led by a large increase in energy commodities, which have risen by 54.5 percent, gasoline, which has risen by 56.2 percent, and fuel oil, which has risen by  50.8 percent. Outside energy, the next highest price increase has been in used cars and trucks, the prices of which have increased by 29.7 percent over a year. After that was transportation services, which rose in price by 11.2 percent (likely due to the aforementioned increases in gasoline prices).

In contrast, food prices have risen less dramatically. Food has become 2.2 percent more expensive in the same time period, especially meals out, which became 4 percent more expensive. While the increase in April was broad based, the BLS said that the May food increase was driven mainly by meats, poultry, fish and eggs. As one might imagine, the index for food at employee sites and schools declined sharply over the last year, falling by 34.4 percent.

Federal Reserve Chair Jerome Powell
, on more than one occasion, encouraged people not to panic, saying that the recent price increases will work themselves out eventually. The central bank's position is that inflation will continue for the next year or so at 3.4 percent but then slowly level down to 2.7 percent in the next five to 10 years.

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