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U.S. CPI inflation rises to 8.6% in May and wages are not keeping up

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U.S. CPI inflation rises to 8.6% in May and wages are not keeping up
Consumer price index inflation last month rose to it's highest rate in 40 years, according to the Bureau of Labor Statistics. File Photo by Bill Greenblatt/UPI | License Photo

June 10 (UPI) -- U.S. Inflation, already at 40 year highs, rose to an annual rate of 8.6% in May, according to the Consumer Price Index summary from the Bureau of Labor Statistics. Inflation was up by 1% in May alone.

"The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors," the BLS inflation statement said Friday.

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Gasoline prices have jumped 48.7% in the 12 months ended in May, fuel oil was up 106.7%. and grocery prices are up 11.9% from 12 months ago, according to the report.

The BLS said, "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."

Inflation is hitting American families hard in everyday expenses from food and gasoline to utilities, shelter and transportation.

Inflation-adjusted wages over the last 12 months fell 3%. In May alone, inflation-adjusted wages were down by 0.6%.

So even though wages have increased in a tight labor market with about a third of employers planning another wage hike this year, wages are not keeping up with the record inflation.

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The Federal Reserve Bank is raising interest rates in a bid to tamp down the record inflation. Minutes from the Fed's May policy meeting indicated that more aggressive interest rate hikes of a half-point are coming.

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