Friday’s inflation report was triple for consumers, with massive price increases for food, shelter and energy – sectors that make up the bulk of household spending – as well as in almost every other category.
However, some of the strongest increases were in the food-at-home sector, where the cost of groceries rose by almost 12% for the year ending in May. This is the largest increase from year to year since 1979.
Categories that experience the largest price jump are usually meal products: dairy products, eggs and meat.
The price of eggs rose by 32.2% from May 2021 to May 2022, according to the latest CPI. Meat, poultry and fish had an increase of 14.2% from year to year, and dairy products increased by 1[ads1]1.8%.
“Food and fuel drive inflation and create pain points for U.S. households,” Joe Brusuelas, chief economist at RSM, said in a Friday memo.
“We need to listen to what consumers say, but more importantly, we need to see what consumers do,” said Jeffrey Roach, chief economist at LPL Financial.
“We expect a decline in consumption as inflation and uncertainty weigh heavily on sentiment,” he said in a statement.
The Federal Reserve, which has a dual mandate to maintain price stability and maximum employment, raises interest rates as a way to curb rising inflation and cool the economy, but it is far from an overnight process.
While the inflation report brought new attacks on the Biden administration from Republicans, the White House tried to blame the worst of inflation on the rise in oil and gas prices after Russia invaded Ukraine.
“Today’s inflation report confirms what Americans already know. Putin’s price hike is hitting Americans hard,” said President Joe Biden at the Port of Los Angeles, where he took a break from a regional summit to address what his team sees as the most pressing issue. : high prices on everything from gas to groceries.
Biden tried to both acknowledge the pain Americans feel, explain how he was looking to resolve it, and blame others.
“I understand,” Biden said. “Inflation is a real challenge for American families.”
He apologized to shipping conglomerates for raising prices and oil companies for their share repurchases, and designated oil giant Exxon to make “more money than God” last year.
– CNN’s Kevin Liptak contributed to this report.