If you think things have gotten more expensive -- you're right. Prices on consumer goods jumped in May and even more over the past year. It’s the biggest annual jump we’ve seen since 2008.
The Consumer Price Index, the Department of Labor’s measure of price changes over time, increased by 5% last month. Inflation is at its highest since May 1992 when you exclude food and energy prices, also called "core inflation."
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This surge in inflation comes as the economy recovers from the global coronavirus pandemic. As people return to normal activities, demand is rising. More people are shopping, traveling, and dining out. Entertainment events like concerts and professional sporting games have resumed.
That increased demand reflects in the prices of goods and services because of shortages. Ordering your favorite Starbucks treat might mean forgoing your beloved oat milk or syrup, and Chipotle’s entire menu saw a 4% jump. In electronics, semiconductor shortages are hurting computer companies.
For car sales, chip shortages are hampering the production of vehicles for Volkswagen and GM. Prices on used cars and SUVs climbed 7.3% in the last month. That alone accounted for one-third of the overall index increase, according to the Wall Street Journal.
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Companies are passing along the increased costs of goods and services to consumers amid the shortage of materials. Experts predict the inflation spike will be temporary.