US CPI in May May Hit a Three-Year High, Consumer Confidence and Purchasing Power Continue to Be Eroded

Odaily Odaily星球日报讯 Economists expect that a key inflation indicator released on Wednesday will show that US consumer prices in May rose at the fastest pace in over three years. Mark Zandi, chief economist at Moody's Analytics, stated that unlike the inflation driven by supply chain disruptions during the COVID-19 crisis, the recent wave of price increases is mainly attributable to government policies, including the war in Iran. 

He said, "It's been nearly five years since inflation last met the Fed's target, and I think this has gradually eroded the collective psyche, which is one reason why people feel so bad 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 that the May CPI data shows that rising energy prices may be a primary driver of persistent inflation.

Zandi noted that besides energy costs, economists will also focus on goods and services costs on Wednesday to assess how higher fuel prices are affecting the economy. He said, "It's not just the price of gasoline going up; diesel prices are also rising, which pushes up the cost of all goods transported by truck, from groceries to Amazon packages. It's also more expensive to fly now because airlines have passed on higher jet fuel costs to passengers." (Jin Shi)