Consumer prices spiked in May, dashing hopes after inflation moderated somewhat in April.
Instead, the May Bureau of Labor Statistics’ latest Consumer Price Index (CPI) showed a year-over-year increase of 8.6%, the highest since December 1981.
CNBC’s Rick Santelli, seen by many as the father of the Tea Party, was unsparing in his criticism.
Economists were expecting an 8.3% gain.
Skyrocketing gas, grocery and rent prices drove the disappointing numbers. CNBC noted the cost of fuel oil is up over 106% in the past 12 months.
The latest CPI report also showed real wages declined 0.6% between April and May, equivalent to a 3% annual drop.
CNBC further reports:
Shelter costs, which account for about a one-third weighting on the CPI, rose 0.6% for the month, the fastest one-month gain since March 2004. The 5.5% 12-month gain is the most since February 1991.
Finally, food costs climbed another 1.2% in May, bringing the year-over-year gain to 10.1%.
Those escalating prices meant workers took another pay cut during the month. Real wages when accounting for inflation fell 0.6% in April, even though average hourly earnings rose 0.3%. On a 12-month basis, real average hourly earnings were down 3%.
Markets reacted negatively to the report, with stock futures indicating a sharply lower open on Wall Street and government bond yields rising.