Annual inflation rises to 8.6% in May, highest since December 1981

Update June 15, 2022: The Federal Reserve has raised interest rates to battle against inflation.

Food and energy costs pushed the U.S. Consumer Price Index up 1% in May, after rising 0.3% in April, according to the report published June 10 by the federal Bureau of Labor Statistics (BLS).

The index for all urban consumers, for all items, rose 8.6% for the 12 months ending in May, the largest 12-month increase since the period ending in December 1981. The all-items index, minus food, rose 6% in the last 12 months, while the energy index rose 34.6% in the last year, the largest 12-month increase since the period ending in September 2005, according to the BLS figures.

The medical care index, minus energy services, rose 0.4% in May and 4% on the year, with medical care indexes mixed for the month. In May, prices of hospital services rose 0.5%, but physician services and prescription drug prices dipped 0.1%. Medical care commodities prices rose 2.4% for the month, with that figure not seasonally adjusted, according to BLS.

Taken separately, food prices rose 1% in May and by 8.6% for the 12 months ending with May. Energy costs were up 3.9% last month and up 34.6% for the year period ending in May.

Gasoline prices rose 4.1% for the month and were up 48.7% for the 12 months ending in May. Fuel oil prices spiked 16.9% in May and have more than doubled in the last year, up 106.7% in the 12 months ending in May. It was the largest increase in the history of the figures, dating back to 1935.

Natural gas prices rose 8% in May and were up 30.2% in the last year, the largest such increase since the year ending July 2008.

In a statement, President Joe Biden said inflation is his top economic priority.

He blamed “Putin’s Price Hike:” gas prices up $2 a gallon at the pump, energy, and food prices accounted for about half of the monthly price increases. It was a reference to Russian President Vladimir Putin and that nation’s invasion of Ukraine.

“Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that,” Biden’s statement said. “The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output. But it is also important that the oil and gas and refining industries in this country not use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes.”

The president called on Congress to act on legislation to cut costs of shipping, energy, and prescription drugs, and he suggested tax reforms to make the wealthiest Americans and big corporations “pay their fair share.”