The Labor Department reported that annual inflation in the U.S. rose above 2 percent for the first time since late-2012 as a surge in energy prices added to broad-based inflation in other categories of consumer goods and services. Overall prices jumped 0.4 percent in May, the biggest gain in almost two years, and are now 2.1 percent higher than a year ago.
Expectations were for an increase of just 0.2 percent and “core” consumer prices – excluding food and energy – came in higher as well, up 0.3 percent versus a consensus estimate of 0.2 percent. On a year-over-year basis, core inflation now stands at 2.0 percent.
Overall energy prices jumped 0.9 percent last month paced by a surge of 2.3 percent in electricity costs and an increase of 0.8 percent for motor fuel. Food prices rose 0.5 percent with a gain of 1.4 percent for meat, poultry, fish, and eggs leading the way, closely followed by a gain of 1.1 percent for fruits and vegetables.