Prices of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs. 

Consumer prices surged by 8.6 per cent last month from a year earlier, faster than April’s year-over-year increase of 8.3 per cent, the Labor Department of the US said on Friday. The new inflation figure, the highest since 1981, will heighten pressure on the Federal Reserve to continue raising interest rates aggressively. 

On a month-to-month basis, prices jumped by 1 per cent from April to May, much faster than the 0.3 per cent increase from March to April. Contributing to that surge were much higher prices for everything from airline tickets to restaurant meals to new and used cars. Those price spikes also elevated so-called “core” inflation, a measure that excludes volatile food and energy prices. In May, core prices jumped sharply by 0.6 per cent for a second straight month. They are now 6 per cent above where they were a year ago. 

Friday’s report underscored fears that inflation is spreading well beyond energy and goods, whose prices are being driven up by clogged supply chains and Russia’s invasion of Ukraine. It also sent stock prices tumbling. The increased pressure on the Fed to raises rates even faster – which means higher-cost loans for consumers and businesses – will raise the risk of a recession too.