Inflation continues to rise, with gas prices up almost 50% since last year

Despite some deceleration in April, inflation continues to rise rapidly, according to new Labor Department data released on Friday.

Year over year, the prices of consumer goods and services as a whole have increased by 8.6% as measured by the consumer price index (CPI). This is the largest 12-month increase since December 1981.

Month-on-month inflation rose 1% in May after rising just 0.3% in April, mainly due to increases in housing, gas and food prices.

Core inflation, a measure that excludes food and energy prices, which can be volatile, rose 0.6% in May, in line with April’s rise.

All of this means that the cost of everything from food to rent will continue to rise, further squeezing Americans’ budgets. That’s how much the prices of certain household goods and services have risen in the past year, according to the Department of Labor.

  • gas: 48.7%
  • Used cars and trucks: 16.1%
  • New vehicles: 12.6%
  • electricity: 12%
  • eat at home: 11.9%
  • Eating out: 7.4%
  • Protection: 5.5%
  • dress: 5%

Gas prices in particular are becoming even more prohibitive, having risen a whopping 48.7% since last year and 4.1% in the last month alone.

To put these numbers in context, according to AAA, a gallon of gasoline currently costs an average of $4.99 in the US as a whole.

Residents in some states feel the burn even more: In Illinois, the average price of a gallon of gasoline is $5.56, according to the AAA. In Nevada it’s $5.62. In California, the average gas price is $6.42 a gallon — but in Mendocino, at least one gas station charges nearly $10 a gallon.

Gasoline prices remain a major concern for Americans, many of whom rely on their cars to get to work. And with the summer driving season in full swing, some might want to get even more use out of their cars.

Rising inflation can also fuel fears of an impending recession. It’s likely: All CFOs who took part in the CNBC CFO Council’s last survey in the second quarter of this year said a recession is inevitable.

But that won’t happen until next year. Of the CFOs who took part in the CNBC survey, 68% said there will be a recession in the first half of 2023.

“The likelihood of a recession this year is pretty slim,” Gus Faucher, chief economist at financial services firm PNC Financial Services Group, told CNBC Make It in May.

However, “it will be more difficult in 2023 and 2024,” said Faucher.

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