Friday’s inflation report was a triple whammy for consumers, with massive increases in food, housing and energy prices – sectors that make up the majority of household spending – as well as in almost all other categories.
But some of the biggest increases were in the home dining sector, where the cost of groceries jumped nearly 12% for the year ending May. This is the largest year-over-year increase since 1979.
The categories with the biggest price increases tend to be staple foods: dairy, eggs and meat.
The price of eggs increased by 32.2% from May 2021 to May 2022, according to the latest CPI. Meats, poultry and fish saw a 14.2% year-over-year increase, and dairy jumped 11.8%.
“Food and fuel drive inflation and create weak spots for American households,” Joe Brusuelas, chief economist at RSM, said in a Friday note.
“We need to listen to what consumers are saying but, more importantly, we need to monitor what consumers are doing,” said Jeffrey Roach, chief economist at LPL Financial.
“We expect consumer spending to slow as inflation and uncertainty weigh heavily on sentiment,” he said in a statement.
The Federal Reserve, tasked with a dual mandate of maintaining price stability and maximum employment, is raising interest rates to dampen rising inflation and cool the economy, but it’s is far from an overnight process.
As the inflation report sparked fresh attacks on the Biden administration from Republicans, the White House sought to blame the worst of inflation on rising oil and gasoline prices after Russia’s invasion of Ukraine.
“Today’s inflation report confirms what Americans already know. Putin’s price hike is hitting Americans hard,” President Joe Biden said at the Port of Los Angeles, where he was taking a break during a regional summit to address what his team sees as today’s most pressing issue. : High prices on everything from gas to groceries.
Biden has sought both to acknowledge the pain Americans are feeling, to explain how he seeks to resolve it, and to blame others.
“I understand,” Biden said. “Inflation is a real challenge for American families.”
He lambasted shipping conglomerates for raising prices and oil companies for their share buybacks, pointing the finger at oil giant Exxon for making “more money than god” last year.
— CNN’s Kevin Liptak contributed to this report.
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