Price spike triggers new political debate on inflation
|New data showing a higher than expected May jump in inflation underscored how a bumpy recovery from the coronavirus recession poses political challenges for President Biden and the Federal Reserve.
The consumer price index (CPI) rose 5 percent in the year leading into May, the Labor Department reported Thursday, marking the fastest annual increase since August 2008 and slightly exceeding the expectations of economists. The CPI minus food and energy prices, which are more volatile, also rose 3.8 percent.
The CPI, a closely watched gauge of inflation, was driven higher primarily by factors analysts expect to be temporary, such as a national used car shortage, a rush of diners back into restaurants, and demand for certain goods outpacing manufacturers’ ability to supply them.