According to the BLS, headline CPI rose 0.5% in May and is up 4.2% compared to a year ago, accelerating from April’s 3.8% annual increase. The more encouraging news came from core CPI, which excludes the more volatile food and energy categories.
Core prices rose just 0.2% in May, helping to ease some inflation concerns. On an annual basis, core CPI increased 2.9%, ticking up slightly from 2.8% in April.
Rising energy and gasoline prices are the primary culprits behind the significant rise in the CPI. Let’s review Figure 1. Energy prices have surged. Outside of energy, price increases are somewhat elevated, but we aren’t seeing significant pressures in food or core inflation—all items except food and energy.
Meanwhile, here’s one more look at two broad categories in the CPI. Shelter (housing, rent) is rising at about the rate it was in the late 2010s. But that’s not the case for core consumer goods—excluding food and energy—and services (excluding housing). They remain somewhat elevated.
