Inflation hit a 40-year high at 8.6%
The cost of gas, groceries, or, electricity prices has jumped to a 40-year high according to the new inflation rate report.
Consumer prices surged 8.6% last month from a 12 months earlier. The inflation report grew faster than April year-over-year by 8.3% the Labor Department reported Friday.
when looking at a month over month basis consumer procs jumped 1%. The report showed that gas prices are largely to blame for the steep increase in the United States inflation.
While prices continue to surge economists are expecting inflation to ease up by the end of the year though not by very much. Experts are expecting the inflation rate to be around 7% by the end of the year. The current inflation rate of 8.6% is the highest since 1982.
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.
Goods prices are expected to fall in the coming months. Many large retailers, including Target, Walmart, and Macy’s, have reported that they’re now stuck with too much of the patio furniture, electronics, and other goods that they ordered when those items were in heavier demand and will have to discount them.
Economists have pointed to that shift in spending from goods to services as a trend that should help lower inflation by year’s end. But with wages rising steadily for many workers, prices are rising in services as well.