May 2021 CPI, June UI Claims

Robert A. Dye, Ph.D.


Daniel Sanabria

Grocery Shopper

The Consumer Price Index increased by 0.6 percent in May, following a 0.8 percent increase in April and a 0.6 percent increase in March.

Strong Inflation Again in May, UI Claims Continue to Trend Down

• The Consumer Price Index for May increased by 0.6 percent for the month.
• Core CPI increased by 0.7 percent in May. 
• Initial Claims for Unemployment Insurance fell by 9,000 for the week ending June 5, to hit 376,000.

The Consumer Price Index increased by 0.6 percent in May, following a 0.8 percent increase in April and a 0.6 percent increase in March. For the year ending in April headline CPI was up by 5.0 percent, noticeably above gains in wages and salaries for most households. April and May saw broad-based consumer price gains well beyond energy. In fact, the energy price sub-index declined by 0.1 percent in April and was unchanged in May. Food prices have been going up, increasing by 0.4 percent in both April and May. Core CPI (all items less food and energy) increased by 0.7 percent in May and was up by 3.8 percent over the previous 12 months. Vehicle prices have hit the accelerator as dealer inventories dwindle with production hampered by the global chip shortage. New car prices were up by 1.6 percent in May. Used car prices were up 7.3 percent in May after gaining 10 percent in April. Most major categories of both goods and services were up in price by well more than 2.0 percent for the year ending in May. We expect the Federal Reserve to maintain its view that inflation is transitory and keep monetary policy accommodative with the fed funds rate anchored near the zero lower bound at the upcoming Federal Open Market Committee meeting over June 15/16.

Unemployment insurance claims continue to trend lower. Initial claims for the week ending June 5 fell by 9,000 to reach a post-pandemic low of 376,000. Continuing claims fell by 258,000 for the week ending May 29, to hit 3,499,000. The total numbers of unemployment insurance claims for all programs fell by 95,099 for the week ending May 22, to 15,349,465. Alaska, Iowa, Mississippi and Missouri will end enhanced unemployment benefits on June 12. Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming will end enhanced benefits on June 19. Arkansas, Florida, Georgia, Ohio, South Carolina, South Dakota, Texas and Utah will stop on June 26. Montana and Oklahoma will end on June 27. Maryland and Tennessee will end on July 3. Arizona will end on July 10. Some states that are not ending enhanced benefits early are modifying their programs to provide incentives to take jobs and to require active job seeking. The federal program supporting enhanced benefits will end in early September. The Biden Administration has indicated that it will not seek to extend enhanced benefits beyond early-September. 

Market Reaction: U.S. equity markets opened with gains. The 10-Year Treasury bond yield is up to 1.49 percent. NYMEX crude oil is up to $70.48/barrel. Natural gas futures are up to $3.17/mmbtu.

For a PDF version of this publication, click here: May 2021 CPI, June UI Claims

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June 10, 2021
Robert A. Dye, Ph.D., Senior Vice President and Chief Economist at Comerica Bank

Robert A. Dye, Ph.D.

Senior Vice President and Chief Economist
Daniel Sanabria, Senior Economist at Comerica Bank

Daniel Sanabria

Senior Economist

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