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Consumer costs jump 8.6 percent in May, driven by record gas prices

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Dan McCaleb | The Center Square

(The Center Square) – The price of food, gas and other consumer goods spiked again in May, as inflation is forcing Americans to make tough decisions about how to spend their money.

According to the U.S. Department of Labor, consumer prices climbed 8.6 percent in May over the same period last year, the largest increase since 1981. From April to May, costs jumped 1 percent, a sharp increase over the 0.3 percent spike from March to April.

The cost of gasoline is driving the 40-year-high inflation, as gas prices rose for the 12th consecutive day overnight. The average cost of a gallon of regular gasoline is now $4.99, according to AAA, a penny from the $5 threshold that motorists in more than 20 states already are paying.

The food index rose 10.1 percent over 12 months and 1.2 percent from April to May. The cost of housing, rent, home energy and airline tickets also saw significant increases. Core prices, which exclude food and energy, rose 6 percent over the year.

Stock futures dropped after Friday's inflation report was released.

Lower income Americans are being hit the hardest by rising prices because they have less discretionary money to spend.

"What's both remarkable and troubling is the lack of discussion over the price level, which is the new 'floor' for prices in the economy," Erik Randolph, director of research at the Georgia Center for Opportunity, said. "The only discussion is about bringing the inflation rate back down. This means that the federal policymakers are willing to leave the price level elevated. Leaving the price level elevated means we are leaving the economically disadvantaged further behind, exacerbating the economic divide in our nation."

A new poll from the Trafalgar group shows that a majority of Americans think President Joe Biden "is intentionally letting gas prices rise to make Americans use less fossil fuels." According to the poll, 53 percent of Americans believe so, 39.6 percent don't think the president is intentionally letting gas prices rise, while 7.4 percent are unsure.

“Surging gas prices are creating immense hardships both for everyday Americans and for our economy at large," Mark Meckler, president of Convention of States Action, said in a statement accompanying the poll. "This stunning data reveals that a majority of voters believe our gas crisis is by design. Specifically, that President Biden is intentionally allowing gas prices to continue to rise in order to advance the political agenda of Washington, DC special interests."

Among other restrictions on the oil and gas industry, Biden halted new leases for drilling on federal lands and ended the Keystone Pipeline project.