Released Thursday, the Department of Labor’s data showed the Consumer Price Index (CPI) rose .6% last month.
The CPI is a measure economists use to measure changes in inflation. It does this by measuring prices on goods. The .6% jump brings the annual increase to 5%, which is far over what economists had originally predicted.
According to the Wall Street Journal, economists had predicted the annual rate to maintain at 4.7%. When considering the CPI for food and energy, those indicators rose .7% in May and .9% in April.
The Department of Labor said this is “the largest 12-month increase since a 5.4% increase for the period ending August 2008.” The report went on to say the primary CPI “rose 3.8 percent over the last 12-months increase since the period ending June 1992.”
This news comes on the heels of two disappointing job growth numbers. With the Biden Administration at the helm, many wonder how much of the slow job growth is due to Biden’s enhanced unemployment benefits. These benefits have been cited as reasons for why some in the workforce would rather not participate and get unemployment instead.
Reasons as to why inflation has increased to such an extent are largely blamed on pandemic shutdowns, which reduce consumer spending. Experts believe, after the summer, inflation rates may slow. However, economists are unsure as to the extent to which government policies are affecting these large swings in inflation growth.
Many point to the trillion-dollar spending packages the government pushed into the economy during the pandemic. The effect of that money increases the money supply, but it also spurs inflation for goods large and small.