Worst Inflation Since 1981: Where NJ Stands Amid Skyrocketing Prices

NEW JERSEY — Inflation hit is highest-reported increase in more than 40 years, adding another challenge for New Jerseyans trying to make ends meet. The Consumer Price Index — a wide-ranging measure of the prices of goods and services — rose 8.6 percent in May from a year ago — the highest leap since December 1981.

The report highlighting May's inflation numbers, which the Bureau of Labor Statistics released Friday, exceeds the 8.3 percent Dow Jones estimate. Meanwhile, New Jersey's average gas prices hit $5 per gallon this week for the first time. The state average is $5.04 per gallon as of Friday, according to AAA.

In the Northeast Region, which includes New Jersey, prices have increased 7.5 percent from May 2021 to May 2022, including a 0.9 percent rise since April. Gas prices rose 10.8 percent in the past month, while food prices increased 1.1 percent from April to May.

Meanwhile, the Federal Reserve announced its biggest interest-rate hike in 28 years Wednesday amid the central bank's struggle to regain control over soaring prices. The Fed raised its benchmark interest rate by three-quarters of a percentage point — the biggest hike since 1994 — which follows rate hikes of a quarter-point in March and a half-point in May.

Here were the price changes on pantry staples last month in the region:

• food and beverages: up 1.1 percent from April and 8.7 percent from May 2021
• food at home: up 1.4 percent from April and 10.4 percent from May 2021
• cereals and bakery products: up 1.4 percent from April and 10.4 percent from May 2021
• meats, poultry, fish and eggs: up 1.9 percent from April and 11.7 percent from May 2021
• dairy and related products: up 0.2 percent from April and 10.6 percent from May 2021
• fruits and vegetables: up 0.6 percent from April and 8 percent from May 2021
• nonalcoholic beverages and beverage materials: up 1.4 percent from April and 9.7 percent from May 2021
• other food at home: up 1.9 percent from April and 10.8 percent from May 2021
• food away from home: up 0.5 percent from April and 6.3 percent from May 2021
• alcohol: up 1 percent from April and 4.9 percent from May 2021

The government report released last month offered potential signs of inflation slowing down, as the April-over-May increase in the Consumer Price Index was the smallest monthly increase in seven months. But economists warned that one month of data wasn't enough to show whether inflation was headed downward. And the 8.6 percent inflation increase from May 2021 to last month illustrates that.

Nationally, wages fell 0.6 percent when accounting for inflation in April, even though hourly earnings increased 0.3 percent, the Bureau of Labor Statistics also announced Friday. Within one year, average hourly earnings went down 3 percent when accounting for inflation.

Stark inflation and mounting fears of a recession have increased pressure on the White House and President Joe Biden to find solutions. The administration continues to place much of the blame on supply-chain issues related to the pandemic, but President Biden also continued to blame "Putin's Price Hike" in a Friday statement on the Consumer Price Index.

"Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that," President Biden said. "The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output. But it is also important that the oil and gas and refining industries in this country not use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes."

But lawmakers have pushed back against the narrative of largely pinning inflation to Russia's attacks of Ukraine, as the steady, nationwide rise in gas prices began rising well before Russia's Feb. 24 invasion.

"Bidenflation is already costing American families $600 each month," tweeted Rep. Brain Mast, a Florida Republican. "House Democrats should focus on that – not relitigating January 6th."