Forecasters say inflation likely hit a new, four-decade high last month, fueled in part by record high gasoline prices. Gas prices have since fallen, but overall inflation is still elevated.
Consumers are watching their pennies at the gas station and grocery store as consumer prices surged 8.6% in May, pushing the annual inflation rate to its highest in over 40 years.
Inflation in March was the highest since December of 1981, with prices up 8.5% from a year ago. Rising prices are especially hard on low-income people, who spend more of their money on necessities.
The Labor Department says consumer prices jumped 5% for the 12 months ending in May. That's the sharpest increase in nearly 13 years, as the economy rebounds from the pandemic recession.
Consumer prices jumped last month as businesses struggled to keep pace with booming demand, but the Biden administration and the Federal Reserve say the uptick in inflation is likely to be temporary.
Consumer prices rose 0.4% in August and 1.3% over the last 12 months. Some economists say that official measure understates inflation, because the pandemic has changed both what and how we buy.