US May CPI could hit a new three-year high, consumer confidence and purchasing power continue to erode

Odaily Planet Daily News: Economists predict that a key inflation indicator due out Wednesday will show U.S. consumer prices rose at the fastest pace in over three years in May. Mark Zandi, chief economist at Moody's Analytics, said that unlike the inflation driven by supply disruptions during the COVID-19 crisis, this recent wave of price increases is primarily attributed to government policies, including the war in Iran. 

He stated, "It’s been nearly five years since inflation was last at the Fed’s target, and I think that has gradually eroded the collective psyche, which is one reason people feel so awful about the economy." According to a recent CBS News poll, three-quarters of Americans say their incomes are not keeping up with inflation. Economists say May's CPI data suggests rising energy prices may be the primary driver of persistent inflation.

Zandi noted that beyond energy costs, economists will also closely watch goods and services costs on Wednesday to assess how higher fuel prices are impacting the economy. He said, "It's not just gasoline prices that have risen; diesel prices have also gone up, pushing up the cost of everything shipped by truck, from groceries to Amazon packages. Air travel is also more expensive now because airlines have passed on higher jet fuel costs to passengers." (Jinshi Data)