US inflation reached a 40-year high in May, accelerating unexpectedly and pressuring the Federal Reserve to enact a series of aggressive interest rate hikes.
Consumer prices surged 8.6 percent last month from 12 months earlier, faster than April’s year-over-year surge of 8.3 percent, the US Department of Labor said Friday.
Inflation was expected to climb by 8.2 percent in May, which would be lower than April’s 8.3 percent.
The main contributions to rising inflation rates were housing, food, and gas. The core Consumer price index (CPI), which excludes the more volatile food and energy components, rose to 0.6 percent month-over-month and 6 percent year-over-year, both exceeding expectations.
In comments Tuesday before the Senate Committee on Finance, US Treasury Secretary Janet Yellen said the US is experiencing “unacceptable levels of inflation” and that a proper fiscal stance is needed to aid curb inflationary pressures without tipping the economy into a recession.
For his part, economist Mohamed El-Erian said that it is too early to expect inflation in the United States to have reached its peak.
El-Erian expected that June’s numbers would be worse, owing to rising energy prices and pressures on the housing and food sectors.
