CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s May Consumer Index Report:   

“Consumer prices remained elevated in May in line with consensus expectations. Price increases were evident in all major categories with housing, energy, and food prices contributing the most. Used car prices went up last month after showing a decline in the previous three consecutive months. 

“Oil prices also increased in May and are expected to remain elevated amid high summer travel demand and low supply due to the Russia-Ukraine war. The price of brent crude oil is trading above $120 a barrel -- 30% higher prior to the start of the war. People are feeling these higher prices when they are filling their tank. A persistent increase in oil prices also has a cascading effect on prices of other commodities and services because oil represents a big portion of production costs. 

“The Federal Reserve Open Market Committee (FOMC) is expected to increase the interest rate by another 50-basis point when they meet next week. This will reduce inflationary pressure by slowing consumer demand. However, it has little effect on influencing prices caused by supply shortages such as oil.”