U.S. consumer prices rose sharply for the second month in a row, and the inflation rate last year peaked in fall 2012. This upward trend is a cause for concern for the Fed, if it is to continue in the future. The consumer price index rose 0.4% last month, seasonally adjusted, as stated in the Department of Labor on Tuesday. Over the past 12 months, consumer price inflation reached 2.1%, although only eight months ago, it stood at 1.0%.
In May, the price of electricity rose by 0.9%, and food – by 0.5%, showed growth and other major categories. Basic index CPI, excluding volatile food prices and energy, rose 0.3%, the highest increase since August 2011.
Economists surveyed by MarketWatch, predicted that both basic and total CPI index will rise by 0.2% last month. Real or inflation-adjusted hourly wage declined by 0.2% in May, as rising prices for consumer goods “overtaken” wage growth. Real wages fell by 0.1% over the past 12 months, suggesting that the Americans have no possibility to increase spending and thus strengthen the economy.