As pent-up demand and rising commodity prices have triggered concerns about inflationary pressures, US consumer prices are expected to accelerate further in May.

Economists surveyed by Refinitiv expect that the US Bureau of Labor Statistics will report that consumer prices in May rose by 4.7% compared to the same period last year, which is the largest increase since the 4.9% increase in September 2008. April.

The data will be released at 8:30 am Eastern Time on Thursday.

Excluding volatile items such as food and energy, the so-called core CPI is expected to rise from 3% in April to 3.4% in May.

Although the recent price spikes are partly due to lower inflation levels at the beginning of the coronavirus pandemic, rising commodity prices and rising demand for rental cars, hotels and flights have also driven this trend as the US economy reopens.

Used car pricesThe rise in the case of semiconductor shortages affecting automobile production is expected to slow down, but it remains high.

The Fed’s policymakers are more tolerant of inflation, partly because, despite loose monetary policy, consumer prices have been sluggish for a long time.

The Fed has repeatedly stated that the recent increase in inflation may be temporary rather than continuous. minute The results of the central bank’s April monetary policy meeting showed that officials remained relatively optimistic about inflation.

But Gregory Daco, chief U.S. economist at the Oxford Economics Institute, said that although some factors that push up inflation-such as the base effect and rising energy prices-will dissipate, some of the increases will be “sticky”. of”.

Some people, including Republican lawmakers, believe that the Fed has underestimated the risk of rising inflation.

Credit Suisse Chief Economist James Sweeney said: “Worries about inflation are a bit like phantom limb pain because they actually cut off the problem, but it’s still painful, and it’s painful, because even if the limb disappears, the fear Will be remembered too.”

He said there are signs that demand is responding to price increases in a normal way, and one example is the decline in mortgage applications. “This proves that we are not experiencing serious inflationary growth driven by expectations,” he said.