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US annual inflation hits 8.6% in May, highest since 1981

Annual inflation in the US hit 8.6% in May, the highest since December 1981, official data showed on Friday.

The figure was above market forecasts of 8.3%.

"The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors," according to the US Bureau of Labor Statistics.

Energy prices rose 34.6% on an annual basis, the most since September of 2005, and food costs soared 10.1%, the first increase of 10% or more since the period ending March 1981.

Last week, the US Treasury secretary conceded that last year she was wrong about “the path inflation that would take."

"There have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that at the time I didn’t fully understand," Janet Yellen told CNN.

In recent weeks some Fed officials also said inflation in the country is comparable to levels seen in 1974 and 1983, when US consumers felt a tight squeeze from high prices.

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