May inflation breakdown: Where are prices rising the fastest?

Inflation’s grip on the U.S. economy eased in May, but soaring rent costs kept prices painfully high for millions of Americans.

The Department of Labour said on Wednesday that the Consumer Price Index, a broad gauge of the cost of everyday items like gasoline, food and rent, was unchanged in May from the previous month. Prices were 3.3% higher than the same period last year. Both figures were lower than the 0.1% and 3.4% month-on-month increases predicted by economists at LSEG.

“The fact that both headline and core inflation came in above expectations was finally a positive surprise,” said Robert Frick, corporate economist at Navy Federal Credit Union. “While there was some relief at the gas pump, unfortunately home and apartment prices continue to rise, which are the main driver of inflation. We won’t see a meaningful decline in the CPI until housing costs start to make their much-needed comeback.”

Here are the areas where prices are rising and falling the fastest, even as Americans are surprised by how expensive they are.

Inflation rose to 3.3% in May, below expectations

rent

Housing costs remained the largest driver of inflation last month, accounting for more than two-thirds of the total monthly increase, according to the report.

Rents rose 0.4% this month, and are 5.3% higher than the same period last year. Rent increases are a concern for a number of reasons: Rising housing costs It has the most direct and serious impact on household finances.

Another data point measuring how much homeowners would pay in comparable rent if they hadn’t bought the home also rose 0.4% from the previous month.

Rents have stagnated, suggesting high inflation may continue

“Home price inflation remains subdued, having risen steadily at a 0.4% monthly pace over the past four months,” said Elizabeth Lenter, senior economist at NerdWallet. “The pent-up nature of these factors is what’s keeping the overall CPI elevated.”

food

Food items are one of the things that many Americans feel most personally affected by inflation, with prices rising sharply in May after remaining stable the previous month.

Food prices rose 0.1% last month, and are 2.1% higher than the same period last year. The eating out index jumped 0.4%, but food prices remained flat. However, food prices are 1% higher than last year, and compared to January 2021, before the inflation crisis began, prices are up more than 21%.

Consumers paid more for several basic foods, including bread (1.1%), pork (0.9%), chicken (1%), oranges (1.6%), apples (0.7%), cereals (0.2%), lettuce (0.8%), and dried beans, peas and lentils (2.4%).

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A shopper scans a coupon at a grocery store in Washington, DC, on May 23, 2024. (Tom Williams/CQ-Roll Call, Inc via Getty Images/Getty Images)

Prices of some items, including coffee, butter, margarine, rice, ham and fresh seafood, fell last month.

energy

Energy prices fell for the first time in four months in May, easing some of the financial pressures for many households. Prices fell 2% for the month as gasoline prices fell 3.6%.

Propane, heating oil and firewood prices also fell 0.3% in May, while fuel oil costs decreased 0.4%.

The lower-than-expected headline inflation rate in May was mainly due to an “exceptional decline” in gasoline prices, said Bill Adams, chief economist at Comerica Bank.

A customer fills up with gas at a Shell gas station in Miami, Florida on May 15, 2024. (Photo by Joe Raedl/Getty Images/Getty Images)

“Gasoline prices tend to rise at the start of the summer driving season, but they rose in the spring on news of the war in the Middle East and then fell in May as demand was weaker than expected,” he said.

car

There’s good news for Americans looking to buy a new car in May.

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Prices for new cars and trucks fell again last month, down 0.5 percent. Prices are 0.8 percent lower than the same period last year.

but Used car prices The price index, the main driver of 2022’s inflation surge, rose for the first time in two months in May, increasing by 0.6%. Year-on-year, prices are down 9.3%.

This used car will be available for sale at a dealership in Chicago, IL on July 11, 2023. (Scott Olson/Getty Images/Getty Images)

Another growing issue for car owners is insurance costs: Auto insurance rates fell 0.1% in May but are still up an astonishing 20.3% compared to the same time last year.

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Travel and Transportation

Ticket prices fell again in May, down 3.6%.

An American Airlines Boeing 737MAX takes off from Miami International Airport in Miami, Florida on December 29, 2020. (Joe Raedl/Getty Images/Getty Images)

Ticket prices are down about 5.9% compared to last year, the data showed.