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Consumer Prices in U.S. Top Forecast, Stoking Inflation

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Prices paid by U.S. consumers rose in May by more than forecast, extending a monthslong buildup in inflation that risks becoming more established as the economy strengthens. The consumer price index climbed 0.6, the secondlargest advance in more than a decade. Though distorted by the pandemic, the CPI jumped 5 from a year ago, the largest annual gain since August 2008, according to Labor Department data Thursday.

The gains were in large part driven by the pricing snapback in categories associated with a broader reopening of the economy. The CPI report showed steady growth in the costs of used vehicles, household furnishings, airfares and apparel. The increase in previously owned cars and trucks accounted for about onethird of the total monthly advance in the CPI, the Labor Department said.

Price pressures continue to build across the economy as businesses scramble to balance a rush of demand against shortages of materials and, in some cases, labor. Shipping bottlenecks, higher input costs and rising wages are challenges to companies looking to protect profit margins. Excluding the volatile food and energy components, the socalled core CPI rose by a largerthanforecast 0.7. The core measure rose 3.8 from 12 months ago, the most since 1992. Its also distorted by the comparison to the pandemicdepressed reading last year.

Underscoring the clear acceleration in inflation more recently, the core CPI over the past three months has increased at a 5.2 annualized pace, the fastest…

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