Tuesday, June 17, 2014

U.S. Inflation on the Rise

WASHINGTON, D.C. -- A jump in food and energy prices last month could indicate that higher inflation is underway this year in the U.S. economy.  Consumer prices across all items increased the most since February 2013 and the food index posted its largest increase since August 2011, the U.S. Bureau of Labor Statistics reported today.


The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in May on a seasonally adjusted basis. Over the last 12 months, the all items index increased 2.1 percent before seasonal adjustment. 


The seasonally adjusted increase in the all items index, which was the largest since February 2013, was broad-based. The indexes for shelter, electricity, food, airline fares, and gasoline were among those that contributed. The food index posted its largest increase since August 2011, with the index for food at home rising 0.7 percent. The increases in the electricity and gasoline indexes led to a 0.9 percent rise in the energy index. 


The index for all items less food and energy rose 0.3 percent in May, its largest increase since August 2011. Along with the indexes for shelter and airline fares, the medical care, apparel, and new vehicle indexes all increased in May. The indexes for household furnishings and operations and for used cars and trucks declined. 


The all items index increased 2.1 percent over the last 12 months; this compares to a 2.0 percent increase for the 12 months ending April, and is the largest 12-month increase since October 2012. The index for all items less food and energy has increased 2.0 percent over the last 12 months. The food index has advanced 2.5 percent over the span, its largest 12-month increase since June 2012.

FOOD

The food index rose 0.5 percent in May after increasing 0.4 percent in each of the three previous months. The index for food at home increased 0.7 percent, its largest increase since July 2011. Five of the six major grocery store food group indexes increased in May. 


The index for meats, poultry, fish, and eggs rose 1.4 percent in May after a 1.5 percent increase in April, with virtually all its major components increasing. The fruits and vegetables index also continued to rise; its 1.1 percent increase in May was its fourth consecutive advance, while the index for dairy and related products increased 0.6 percent, its seventh consecutive increase. 


The index for nonalcoholic beverages rose 0.4 percent in May while the index for other food at home increased 0.3 percent; both indexes had declined in April. 


The only major grocery store food group index to decline in May was cereals and bakery products, which fell 0.1 percent. 


The food at home index has increased 2.7 percent over the last year. The index for meats, poultry, fish and eggs has risen 7.7 percent over the span. The index for nonalcoholic beverages has decreased 0.9 percent, the only major food group index to decline. 


The index for food away from home rose 0.2 percent in May and has risen 2.2 percent over the past 12 months.

ENERGY

The energy index increased 0.9 percent in May after rising 0.3 percent in April. Major energy components were mixed in May. The electricity index rose 2.3 percent in May after declining 2.6 percent in April. 


DOL says that this increase is largely due to semiannual climate credits applied to electricity bills in California. The credits were applied to bills in April, causing the decline, while the May increase reflects those bills returning to levels that do not include the credit. 


The gasoline index rose 0.7 percent in May. (This was the same as the increase before seasonal adjustment). In contrast, the index for natural gas declined in May, falling 1.7 percent after increasing in each of the four previous months. The fuel oil index also declined in May, falling 1.4 percent. The energy index has risen 3.3 percent over the past 12 months, the same 12-month change as in April. All major energy component indexes have increased over that time period, including electricity (3.6 percent) and gasoline (2.3 percent). 


All items less food and energy

The index for all items less food and energy increased 0.3 percent in May after increasing 0.2 percent in March and April. The shelter index increased 0.3 percent in May. The rent index rose 0.3 percent and the index for owners’ equivalent rent increased 0.2 percent. The index for lodging away from home rose 2.0 percent and has increased 4.0 percent over the last three months. The index for airline fares rose sharply in May; its 5.8 percent increase was the largest since July 1999. The medical care index increased 0.3 percent in May, as the index for prescription drugs rose 0.7 percent. The apparel index rose 0.3 percent in May after being unchanged in April. The new vehicles index also increased in May, rising 0.2 percent, as did the indexes for personal care and for tobacco. In contrast to these increases, the household furnishings and operations index fell 0.2 percent, while the index for used cars and trucks declined 0.1 percent. The indexes for recreation and for alcoholic beverages were unchanged in May.

The index for all items less food and energy has risen 2.0 percent over the last 12 months; this is the highest figure since February 2013. The 12-month increase in the shelter index reached 2.9 percent in May, its highest level since March 2008. The index for airline fares has increased 4.7 percent over the span, and the medical care index has risen 2.8 percent. Indexes that have risen more modestly over the past 12 months include apparel (0.8 percent), new vehicles (0.5 percent), and used cars and trucks (0.2 percent).


SIMILAR STORIES:

Real U.S. Wages, Earnings Fall