Consumer prices jumped to their highest level in 15 months this May. The Labor Department reports that there was a 0.4% percent rise in the consumer price index for the month of May, higher than the 0.2% expected. This rise is due to a number of factors, but most noticeably the recent increase in the inflation rate. According to the USA Today core inflation, which excludes the volatile food and energy categories, was up 0.3% last month. Though this data reflects that consumer goods are slightly more expensive than in the past, this data can actually be seen as beneficial for the consumer. The increase in the consumer price index can be seen to signal growth in the economy. This is due to the fact that the price increase signals an increase in overall inflation in the US, beyond the stagnant inflation growth that has been seen in the past years. Therefore, the fact that it appears that the inflation rate is headed back towards the Federal Reserve’s target of 2% perhaps signals that the economy is improving.
Read More- “Consumer Prices Rise Sharply in May” (Paul Davidson, USA Today)