Consumer Price Index (CPI): U.S. Inflation to 40-year high of 8.6%

Consumer Price Index (CPI): Inflation in the U.S. in May hit a high of up to 8.6% in 40 years since 1981. The cost of living rose 1% in May due to higher rents, gas and food prices, pushing US inflation to a 40-year high of 8.6% and making it harder for Americans to make ends meet.

This morning, the Bureau of Labor Statistics (BLS) released the May Consumer Price Index. The index for all commodities rose 8.6% for the previous year, the biggest 12-month increase since the December 1981 period.

Changes due to Inflation

The energy index rose by 3.9%, according to new CPI data. The energy Index grew by 34.6% over the previous year. Gasoline, one of the commodities of daily need, is rising by 4.1%. The food index rose 1.2% in May and the Food at Home indexes rose 1.4%. The food index is up 10.1% over last year.

Huge fall in share prices

US shares opened with a fall today due to CPI. The S&P 500 fell 1.5% shortly after the opening bell. The Dow Jones Industrial Average dropped 483 points or 1.5%, and the Nasdaq Composite dropped 1.8%.

The fall in airline stocks after inflation data reflects rising fares. Inflation data showed airline stocks fell after a hike in fares in May.

Friday’s consumer-price inflation data showed the airline fares index rose 12.6 per cent in May, up from 18.6% in the previous month. The shares of Southwest were down 3.8%, Alaska Air 3.2% and American Airlines 2.4%. The S&P 500 was up about 2.7%.

Dollar Jumps After New Inflation (CPI) Data

The WSJ Dollar Index, which measures the dollar against a hamper of 16 currencies, rose 0.7% to nearly 96.73. The US dollar index, another index investors track, rose nearly 1.0%.

Gold Rises After The Release Of Inflation Data

Gold prices rose this morning as May inflation data indicated prices hit a new four-decade high. The most actively traded gold futures, which were down 1% before the Labor Department’s morning declaration, recently rose 0.4% to $1,859.50 per troy ounce.

The yield on the 10-year Treasury recently traded at 3.137%, compared to 3.041% on Thursday. Higher returns on government bonds can make gold, which doesn’t pay investors a fixed income just for owning the yellow metal, less attractive to hold.

All the indices are rising due to new data of Consumer Price Index US May 2022.

Commodities Index Increase
Dollar Price 0.7%
Dairy Products 2.9%
Used Vehicle Prices 16.1%
New Vehicle Prices 1%
Interest Rate2.75%-3% (expected)

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