The cost of living in the U.S. inched slightly higher in May, according to a government report released Wednesday. The same report shows year-over-year inflation fell by the quickest pace since April 1950.
The Bureau of Labor Statistics Consumer Price Index shows the annual US inflation rate at -1.3 percent. Cheaper energy over the past year is largely responsible.
Core consumer prices, which exclude volatile food and energy prices, declined by the same 0.1 percent in May. The core CPI is up 1.8 percent over the past year and within the Federal Reserve’s traditional comfort range of 1%-2%.
"We could have an inflation problem going forward, but it’s going to have to wait until we get a resuscitation of the banking system," Howard Simons, a strategist at Bianco Research in Chicago, was quoted on Reuters. "Once that happens, we could get an inflation shock."
With the report showing inflation essentially in check, gold-hedged inflation buying was not a factor. The yellow metal rallied after the U.S. dollar weakened following the news, however. Gold futures in New York closed to $936 an ounce Tuesday, rising 0.4 percent on a weaker U.S. dollar.
Consumer price figures in May
Several interesting price figures for May follow:
- Energy costs jumped 0.2% after two straight months of declines
- Gasoline prices surged 3.1 percent following a 2.8% decline the prior month
- New vehicles prices rose 0.5% following a 0.4 % increase in April and a climb of 0.6% in March
- Food and beverage prices fell 0.2% for the second straight month
- Tobacco and smoking products declined 0.3% following the prior month’s 9.3% increase
- Natural gas prices fell 5.7%
Inflation Calculator update
Using the government’s latest Consumer Price Index (CPI) data, the CoinNews US Inflation Calculator reflects the most recent change in consumer prices. By entering any two dates from 1913-2008 and then a dollar amount, the calculator measures the change in the buying power of the dollar over time.
Using the calculator, anyone can determine the purchasing power of the dollar over time. A few examples after adjusting for inflation:
- An item purchased in 1913 for $1 would now cost $21.60
- An item purchased in 1950 for $10 would now cost $88.74
- An item purchased for $20 in 1985 would now cost $39.75
Mixed dates may also be used with the Inflation Calculator. As examples:
- An item purchased today for $500 would have cost $125.79 in 1975
- An item purchased for $1000 in 1980 would have cost $1,586.17 in 1990
Of course, not all "goods and services" rise or fall in tandem with inflation rates. For example, many computers when adjusted for inflation are actually less expensive today (and do more) compared to years ago.
Latest Charts on Inflation Rates
The CoinNews inflation page also includes two updated charts indicating the:
- Annual Averages for Rate of Inflation
- Annual Percent Changes for Rate of Inflation or Inflation Rates
While the Inflation Calculator is more of a general financial interest tool, specific numismatic calculators and tools may be found via the CoinNews menu: "COIN PRICING & COLLECTOR TOOLS".
The CoinNews sister site with the same Inflation Calculator offers additional information on consumer prices and inflation rates.