OUCH

Inflation Reaches a New 40-Year High

Expect prices to keep rising for a long list of household products as well as gas, food, cars, and rent.

Food, cars, gas, rent and other everyday expenses are not likely to get cheaper any time soon. New data released by the Labor Department on Friday showed that inflation reached a new 40-year high of 8.6 percent in May, placing even more pressure on the Federal Reserve and the Biden administration to drive prices back down. The Consumer Price Index rose 1 percent from April, and headline inflation grew the fastest since late 1981. The sharp rise is largely due to the U.S. economy’s supercharged post-pandemic growth but it’s hitting Americans hard. Grocery bills have risen by an annual rate of more than 10 percent this year and a gallon of regular unleaded gas is at about $4.98, according to AAA. Russia’s war in Ukraine has contributed to the spike in global energy prices. The Fed increased interest rates by half a percentage point in May and may do the same again this month as they try to calm inflation.