The cost of living in the United States rose by 0.2 percentage points in May, boosting the annual inflation rate to 3.6 per cent, dpa cited the Department of Labor as saying Wednesday. It was the 11th straight monthly increase in the Consumer Price Index (CPI), driven by increases in the cost of food and other consumer goods. In April, the CPI had risen 0.4 per cent. Inflation rose more than economists had expected, with those surveyed by Bloomberg financial news calling for a 0.1 per cent increase. Much of the increase can be attributed to rising prices for raw materials that manufacturers have passed onto consumers. Energy costs, which had been rising sharply in recent months, fell in May as the price of petrol declined for the first time since last summer. Excluding volatile food and energy, the core index rose by 0.3 per cent, its largest increase in nearly three years, the department said. In April, it had risen 0.2 per cent. The US central bank is considering setting inflation targets for the first time, Bloomberg reported citing people familiar with the discussions. In a bid to spur the uncertain economic recovery, the Federal Reserve has long kept interest rates near zero and chairman Ben Bernanke and others on the Fed board have argued for an inflation target as another way to encourage growth.
