Consumer Prices Increase Broadly in May

Consumer prices in May experienced the largest monthly increase since February 2013. According to data released by the Bureau of Labor Statistics (BLS), consumer prices increased 0.4% on a seasonally adjusted month-over-month basis. Year-over-year, before seasonal adjustments, prices on expenditures made by urban consumers increased 2.1%. The increase was broad, affecting many items found in the consumer basket such as energy, food, and shelter.

Over the past twelve months, the shelter index increased 2.9% before seasonal adjustments. The shelter index rose 0.3% month-over-month in May after increasing 0.2% month-over-month in April.

NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines). However, given that the price index for overall inflation has been reflecting the recent volatility in energy prices using the core index, which excludes food and energy prices, may provide a more reliable comparison between rents and overall inflation.

The NAHB constructed real rent index increased nominally in May. Over the past year, real rental prices rose by 1.1%.

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With respect to other consumer prices, the food index continued its ascent, rising by 0.5% in May on a seasonally adjusted basis. Over the past twelve months the food index increased by 2.5% before seasonal adjustments. The index for meats, poultry, fish, and eggs, a component of the food index, experienced an increase of 1.4% in May after a 1.5% increase in April.

In May, the energy index increased by 0.9% before seasonal adjustments. The increase was driven largely by a monthly increase of 2.3% in the electricity index. Over the past twelve months the energy index increased by 3.3% before seasonal adjustments. The gasoline index, a component of the energy price index, also increased in May, by 0.7% for the month.

The core CPI rose by 0.3% on a seasonally adjusted month-over-month basis and 2.0% for the year before seasonal adjustments. The Core CPI excludes more volatile food and energy prices.

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2 Responses to Consumer Prices Increase Broadly in May

  1. […] contrast, consumer prices in May experienced the largest monthly increase since February 2013, rising 0.4% on a seasonally adjusted month-over-month basis and 2.1% year over year. The increase […]

  2. […]   The price component of GDP is becoming more interesting, however. Starting in 2012, housing has been contributing more to prices, for the most part, as seen in the figure below. In the first quarter of this year, it added over 0.7 percentage points to growth in the GDP price index, led by nearly 0.5 percentage points in the construction component (the most since the third quarter of 2008); the overall price index rose 1.3 percent. This is partly due to increased construction costs and higher rental prices. […]

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