CPI inflation rate: What products are making inflation grow so much? Gas, food...
A new report from the Department of Labor found that the rate of inflation has reached 8.6%, with motor fuel and food experiencing the fastest increases.
The Labor Department has published the consumer price index for May 2022, which showed that the annualised rate of inflation in the United States had risen to 8.6% year-on-year.
The consumer price index (CPI) is a measures of goods and services prices and is used to calculate rising costs. The core CPI, which excludes volatile factors like food and energy, was also a very high 6%.
The Labor Department report came as the average price of gasoline, as calculated by AAA, topped $5 per gallon for the first time in US history. The price of gasoline is up by 48.7% on average, while fuel oil has experienced a 106.7% increase in the past 12 months.
Vehicles have also got much more expensive in the past year, with used cars and trucks costing around 16.1% more than they did at the same point in 2021. New vehicles have also recorded a hefty price hike, with a 12.6% increase.
Food is one of those essential purchases that consumers just can’t do without, so the 11.9% increase in the price of grocery store food will hit households hard across the country. Food away from home (eating out) also costs around 7.4% more than it did 12 months ago. These increases have been fuelled in large part by the invasion of Ukraine, which has disrupted one of the most fertile areas of agricultural land in the world and a key contributor to satisfy the global food demand.
Gasoline fuels inflation reckoning
For weeks experts have been warning of $5 per gallon gasoline prices becoming the norm, but in some parts of the US the price has risen way above that level. In California the average price is now around $6.42 per gallon, with at least one gas station found charging close to $10 per gallon, nearly doubling the national average.
The disparity between the prices in different states comes down to the different tax protocols employed in different areas of the country. California, for example, has one of the highest rates of fuel tax in the US so residents have to pay a bit more for gasoline.
In a White House address given shortly after the Labor Department report was published, President Biden promised to address the high rate of inflation and added that he is aware of the pain at the pump for consumers.
“I understand Americans are anxious, and they’re anxious with good reason,” he said. “I was raised in a household when the price of gasoline rose precipitously, it was the discussion at the table. It made a difference when food prices went up.”