The Consumer Price Index (CPI) rose 0.6% in May, the largest monthly increase since August 2023, according to the U.S. Bureau of Labor Statistics. On an annual basis, prices rose 4.2%, the highest inflation rate since 2008.
The monthly increase was largely driven by rising prices for food, transportation, and housing. Food prices rose 1.1%, with fruits and vegetables seeing the biggest gains, while prices for gasoline, rail fares, and airfares also increased.
Inflation in the housing sector cooled off slightly after several strong months of gains, with prices ticking up just 0.1%. Prices for both rental and owner-occupied housing continued to rise, but at a slower pace than the previous month.
Core inflation, which strips out volatile food and energy prices, rose 0.3% in the month and was up 2.8% from a year ago.
The spike in inflation was largely expected due to the surge in demand and rising prices for many commodities such as gasoline, lumber, and semiconductor chips. However, inflation is expected to remain relatively tame for the remainder of the year due to a slow economic recovery and the expiration of temporary stimulus measures.