Report: Inflation makes jump not seen in over 40 years
MIAMI – A new report from the Bureau of Labor Statistics shows in May consumer prices shot up 8.6% compared to the prior year, a jump not seen in almost 41 years.
A big reason why is gas prices which continue to hit record highs and are forcing commuters to rethink their budget.
"It's a lot of other things I can't do because I have to pay for gas. You know what I'm saying? Less food, less playtime because I got to get gas, I got to go to work, right?"" says Oakland, California resident Quentin McZeal.
The high cost of diesel fuel is also making it more expensive for trucking companies to ship goods to stores.
"That will ultimately be reflected in the prices that the consumer pays. And that's part of the increase in the cost of food and everything else," says Bob Ramorino, President of Roadstar Trucking in Northern California.
The May report from the Bureau of Labor statistics show overall food prices jumped 10.1% in one year, the biggest annual jump since 19-81.
Milk is up 15.9%, chicken costs 17.4% more and eggs soared 32.2%.
CBS News Business Analyst Jill Schlesinger says the Federal Reserve is expected to raise interest rates again next week. It's believed higher interest rates will slow down the economy and in turn ease price hikes. But the effect will likely take time.
"Inflation touches every single American but those who earn less, they feel the biggest brunt. Why is that? Because the three categories of their lives where they spend the most money, which is shelter, food and energy, those areas are rising."
The national average price for gas is expected to keep rising past $5 a gallon and could accelerate even higher if bad weather disrupts offshore oil drilling in the coming months.
"it's not impossible that, should we see a refinery snag or a major hurricane in the Gulf of Mexico, that we could see the national average hitting the $6 a gallon mark," says Gasbuddy.com Energy Analyst Patrick De Haan.
Prices are also fueled by demand which is expected to stay high during the busy summer driving season.