WASHINGTON (AP) - Consumer inflation registered another sizable increase in May, pushed higher by soaring gasoline prices. More worrisome was further evidence that the jump in energy costs is beginning to cause more widespread inflation troubles.
The Labor Department reported Wednesday that its Consumer Price Index posted a 0.4 percent increase in May after an even bigger 0.6 percent rise in April. Gasoline prices jumped by 4.9 percent and have been soaring this year at an annual rate of 69.4 percent as motorists contend with pump prices above $3 per gallon in many parts of the country.
Excluding energy and food, core inflation rose by a larger-than-expected 0.3 percent. That increase was certain to get attention at the Federal Reserve, where Chairman Ben Bernanke last week called a recent uptick in core inflation rates unwelcome.
Bernanke's comments on June 5 contributed to a 199-point plunge that day in the Dow Jones industrial average. Stocks have been posting big losses in recent weeks not only in the United States but around the globe as investors worry about future prospects at a time when the world's largest economy is facing slowing growth and rising inflation pressures.
Investors are concerned that the Fed will raise rates for a 17th time at its next meeting on June 28-29, increasing risks that the hoped-for soft landing for the economy will instead be a more severe slowdown.
The 0.4 percent increase in overall inflation in May was led by a 2.4 percent jump in energy costs after gains of 3.9 percent in April and 1.3 percent in March. So far this year, energy prices have been rising at an annual rate of 30.8 percent, almost double the 17.1 percent gain for all of 2005.