The 5% is compared to a year ago, when the U.S. was still in the beginning of the COVID-19 pandemic. The rising prices, as measured by Labor’s Consumer Price Index, are the highest since 2008 when inflation reached 5.4%. The CPI measures the change in prices paid by consumers for goods and services.
Of note in the latest figures, household furnishings and operations indexed rose 1.3% in May, “its largest monthly increase since January 1976,” the Bureau of Labor Statistics reported. The indexes for both domestic services and furniture and bedding rose.
The food index also rose 0.4% during May, with all six major grocery store food group indexes rising. Meats, fish, poultry and eggs rose 1.3%, and the beef index rose 2.3%--it’s largest jump since last June.
The price jumps come amid a number of shortages across industries, including a chip shortage that is impacting car sales and driving up prices.
Additionally, the price of aluminum fees is skyrocketing, with producers of the metal calling the shots when it comes to negotiations with buyers in Japan, Bloomberg reported. And higher fees means everything from soda cans to electric cars cost more. Japan is Asia’s largest aluminum importer, and what Japan pays tends to set the benchmark for prices elsewhere. In the coming quarter, the nation agreed to pay $185 per ton above benchmark prices in London. That’s the highest in six years and more than double the cost from a year prior, according to Bloomberg.
Rising prices are coming at a time when the labor market is still recovering from the COVID-19 pandemic. Additionally, other supply chain challenges make this an especially tough time for the retail industry. However, the economy is heating up as consumers return to stores. In fact, the outlook is so promising that the National Retail Federation recently updated its forecast for the rest of the year, projecting retail sales will grow between 10.5% and 13.5%, reaching $4.44 trillion.