WASHINGTON — American consumers absorbed another surge in prices in May — a 0.6% increase over the past month and 5% over the past year, the biggest 12-month inflation spike since 2008.
The May rise in consumer prices reflected a range of goods and services now in growing demand as people increasingly shop, travel, dine out and attend entertainment events in a rapidly reopening economy.
The increased consumer appetite is bumping up against a shortage of components, from lumber and steel to chemicals and semiconductors, that supply such key products as autos and computer equipment, all of which has forced up prices.
The lack of semiconductors, and therefore decreased supply of vehicles, forced large increases in automotive prices - driving up overall prices.
Economists say while the increases in this report appear to be sharp, remember they are being compared to prices from a year ago - when the world was in the midst of the worst of the coronavirus pandemic and restrictions were in place.
Central bank officials believe the current increases and supply chain issues are temporary factors that will dissipate as the year goes on.
