Friday’s inflation report was a triple whammy for consumers, with massive increases in the price of food, shelter and energy – sectors that make up the majority of household expenditures – as well as in almost every other category.
But some of the starkest increases were in the home food sector, where the cost of groceries rose nearly 12% for the year ending in May. This is the largest annual increase since 1979.
The categories that see the biggest jump in prices are usually the basic diets: dairy, eggs and meat.
The price of eggs increased 32.2% from May 2021 to May 2022, according to the latest CPI. Meat, poultry and fish saw a 14.2% year-over-year increase, and dairy products jumped 11.8%.
“Food and fuel are driving inflation and creating pain points for American households,” Joe Brusolas, chief economist at RSM, said in a note on Friday.
“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 a slowdown in consumer spending as inflation and uncertainty severely weigh on sentiment,” he said in a statement.
The Federal Reserve, charged with the dual mission of maintaining price stability and creating maximum employment, is raising interest rates as a way to mitigate rising inflation and cool the economy, but it is far from an overnight process.
While the inflation report brought fresh attacks on the Biden administration from Republicans, the White House sought to blame the worst of inflation on high 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 America hard,” President Joe Biden said at the Port of Los Angeles, where he paused for a regional summit to discuss what his team considers the most pressing current issue. Price hikes on everything from gas to groceries.
Biden sought to acknowledge the pain Americans feel, and explained how he was looking to resolve it and blame others.
“I understand,” Biden said. “Inflation is a real challenge for American families.”
He criticized conglomerates of shipping companies for raising prices and oil companies to buy back their shares, and singled out the giant oil company Exxon for making “more money from God” last year.
CNN’s Kevin Liptak contributed to this report.