WASHINGTON - Soaring energy costs pushed inflation up in May at the fastest pace in six months. Food costs kept rising, too, and all signs are pointing to more bad news on gasoline, oil and food in the months ahead.
Costs for clothing and prescription drugs did drop last month, but consumer prices rose by 0.6 percent in all, the biggest one-month increase since November, the Labor Department reported Friday.
Food prices, which had taken the biggest one-month leap in 18 years in April, rose by a more moderate 0.3 percent in May, but that still left food costs rising 6.3 percent so far year, well above last year’s increase. People are paying 10.2 percent more for milk than a year ago.
Consumers are getting hammered by a relentless surge in energy costs, pushing gasoline above $4 per gallon. The rising food prices partly reflect higher costs for transporting products to grocery stores.
Core inflation, which excludes energy and food, edged up 0.2 percent in May, an increase that was in line with expectations and helped to ease worries in financial markets that the Federal Reserve was inching closer to starting to raise interest rates to combat inflation pressures. Clothing costs fell by 0.3 percent and the cost of prescription drugs dropped by 0.7 percent, but airline tickets jumped 3.2 percent, the biggest gain in more than six years.
Private economists cautioned that there would probably be more bad news on inflation in the months ahead given that this year’s oil shock has gone on much longer than expected.
“Businesses that had been patiently waiting for oil prices to fall have run out of patience. We expect more of them to start throwing in the towel and raising prices,” said Kenneth Beauchemin, an economist at Global Insight, noting the announcement by Dow Chemical Co. late last month that it was raising prices by up to 20 percent.