The uptick in inflation would be more modest and would hover nearer around the Federal Reserve’s target, WSJ reported.
- Inflation stood at a 13-year high 5.0% in May, given the base effects as prices plunged the same month in 2020 due to the lockdowns. When compared with May 2019, inflation for the month clocked in at 2.5%.
- Base effects also impacted several sectors as inflation rose year-on-year in May, but were actually below their levels before the COVID-19 pandemic.
- Prices of lodging, hotel and motel prices, climbed 9% year-on-year in May, but were still cheaper than pre-pandemic levels.
- Prices of used cars and trucks recorded a 29.7% year-on-year inflation in May, but this would only be at 13.6% when adjusted for base effects.
The Federal Reserve has maintained that the upward movement of inflation is transitory. It targets inflation at 2%.