The costs of gas, food, and other necessities jumped in May, raising inflation to a new four-decade high.
Consumer prices surged 8.6% last month from 12 months earlier, faster than April's year-over-year surge of 8.3%, the Labor Department said Friday.
High inflation has also forced the Federal Reserve into what will likely be the fastest series of interest rate hikes in three decades. By raising borrowing costs aggressively, the Fed hopes to cool spending and growth enough to curb inflation without tipping the economy into a recession. For the central bank, it will be a difficult balancing act.
America's rampant inflation is imposing severe financial pressures on families, forcing them to pay much more for such items as food, gas and rent and reducing their ability to afford discretionary items, from haircuts to entertainment. Lower-income and Black and Hispanic Americans, in particular, are struggling because, on average, a larger proportion of their income is consumed by necessities.
Now, as Americans resume spending on services, including travel, entertainment and dining out, the costs of airline tickets, hotel rooms and restaurant meals have soared. Russia's invasion of Ukraine has further accelerated the prices of oil and natural gas. And with China now easing strict COVID lockdowns in Shanghai and elsewhere, more of its citizens are driving, thereby sending oil prices up even further.
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