Inflation rose 8.6% in May, highest since 1981

The Bureau of Labor Statistics reported Friday that inflation accelerated further in May, with prices rising 8.6% from a year ago.

The consumer price index increased more than expected. Excluding volatile food and energy prices, the core consumer price index was up six percent.

On a monthly basis, headline inflation was up 1% while core inflation was up 0.6%.

Shelter, gasoline and food prices all increased.

The energy price rose 3.9% from a month ago. The 12-month surge to 106.7% was pushed by fuel oil's 16.9% monthly gain.

Shelter costs, which make up a third of the index, rose 0.6% for the month and are 5.5% higher than a year ago.

The year over year increase in food costs was 10.1% in May.

Workers took a pay cut during the month. Even though average hourly earnings increased, real wages fell in April. Real average hourly earnings were down over the course of the year.

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