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The government announced today that the rate of inflation for the month of May was 8.6 percent — a full percentage point higher than it was in April and dashing hopes that price increases were moderating at all in 2022.

The one percentage point increase is the largest since 1981.

Everything went up, but the increase was most keenly felt in price hikes for food and fuel.

“So much for the idea that inflation has peaked,” Bankrate chief financial analyst Greg McBride told CNBC. “Any hopes that the Fed can ease up on the pace of rate hikes after the June and July meetings now seem to be a longshot. Inflation continues to rear its ugly head and hopes for improvement have been dashed again.”

New York Times:

Policymakers aim for 2 percent inflation over time using a different but related index, which is also sharply elevated. Central bankers are raising interest rates to make borrowing money more expensive, hoping to cool off consumer and business demand and give supply a chance to catch up, setting the stage for more moderate inflation.

The Fed’s attempt to temper inflation by slowing down the economy is contributing to an already sour economic mood. Consumer confidence has been sinking all year as households shoulder the burden of higher prices, and President Biden’s approval ratings have also suffered. Both Wall Street economists and small business owners increasingly worry that a recession is possible in the next year.

Food prices are up 10.8 percent for the year that ended in April 2022, the largest increase since November 1980.

It’s like a bad dream for those of us who came of age in the late 1970s and early 1980s. Younger Americans have no idea of the impact these price increases will have on their lives, their lifestyle, their families, and their jobs going forward.

These prices are never going down — never. Even if the Fed gets inflation back down to 2 percent a year, the baseline index for prices will remain where it is whenever the inflation rate begins to ease.

It will take a generation for American workers to catch up to the price increases caused by the Biden inflation.

BLS:

The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.

The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for medical care, household furnishings and operations, recreation, and apparel also increased in May.

The government has been assuring us that inflation would not be a problem, or when it did become a problem, that it would “moderate” quickly. It’s still a problem, it isn’t moderating, and no one in Washington knows what’s going to happen next.