Last month, prices in the United States grew faster than projected, as rising energy and food expenses drove inflation to its highest level since 1981.
After dropping in April, the annual inflation rate climbed to 8.6% in May, according to the Labor Department.
Households have been squeezed by growing living costs, placing pressure on authorities to address the problem.
Since March, the Federal Reserve of the United States has been hiking interest rates.
Analysts had hoped that the actions would begin to reduce economic activity and relieve pricing pressures. However, the conflict between Russia and Ukraine has exacerbated the situation by driving up the price of oil and other commodities like wheat by disrupting trade between the two nations.
Food costs increased by more than 10% last month compared to May 2021, while energy prices increased by more than 34%.
However, according to Friday's research, the price hikes are spreading across the economy, driving up the cost of everything from plane tickets to apparel to medical services.
"So much for the notion that inflation has reached its limit. "Consumer prices flew past forecasts – and not in a good way," said Greg McBride, chief financial analyst at Bankrate.com. "The 8.6 percent annual increase was the fastest in more than 40 years."
"Worse, the increases were almost universal. There's nowhere to hide." Since last year, when an unexpectedly strong economic rebound from the pandemic's shock – fueled by massive amounts of US government expenditure, including direct checks to people – swamped supply, causing corporations to boost prices, the US has been battling with rising prices.
The conflict in Ukraine has now expanded the problem throughout the world, with Covid-related shutdowns in China contributing this spring.
Officials are warning that GDP in many nations is at risk of a dramatic decline as growing expenses hurt consumer buying power and cause a retreat in expenditure.
"Growth is being hammered by the war in Ukraine, Chinese lockdowns, supply-chain disruptions, and the prospect of stagflation." "Recession will be difficult to avert for many nations," World Bank President David Malpass stated this week.
Following the inflation numbers, US stock markets plummeted, with all three main indices plunging more than 2%. The drops came on top of weeks of losses in US stocks, as investors became concerned about the economy's direction.
"Even if inflation peaks soon, it's unlikely to decline swiftly," said Charles Schwab UK managing director Richard Flynn. "In the medium run, high prices may exert downward pressure on consumer spending."
"When you combine ongoing supply-chain issues with the economic consequences of Russia's invasion of Ukraine, plus the prospect of inflation, it's easy to see why worries of a slump have increased so quickly."
According to polls, the majority of Americans consider inflation to be the country's most serious concern. As Republicans criticize US President Joe Biden over the problem, consumer sentiment has plummeted and his popularity ratings have tumbled.
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