Rising gas, food prices drive inflation up

Rising prices for gasoline and food were primarily responsible for inflation climbing 2.9 percent last month in the metropolitan area compared with a year earlier, the largest such increase in nearly three years.

The U.S. Bureau of Labor Statistics reported Wednesday that retail prices grew faster year over year in May than at any time since October 2008, following a pattern first seen in April. Inflation rose 4.3 percent in October 2008 in the 31-county region that includes Long Island.

Prices also increased 0.6 percent last month over April.

Higher costs for gas, housing and food were to blame, said Michael L. Dolfman, regional commissioner of the federal Department of Labor, which encompasses the bureau.

Pump prices were up 37.7 percent year over year, and 5.8 percent from April. Rent and other housing costs rose 1.2 percent year over year. And food gained 2.7 percent, propelled by higher prices for pork, milk, candy, ice cream and lettuce.

Outside the Giunta's Meat Farms store in Farmingdale Wednesday, shoppers said they had postponed plans to buy a car, appliance or other big-ticket item because they were spending more for staples.

"I'd love to go away on vacation this year, but it's not happening," said Maria Costello, 47, a homemaker from Amityville. "I just cannot put any money aside."

Fiscal experts weren't surprised by last month's regional Consumer Price Index, saying it was another indicator that the recovery has slowed.

"Energy prices are high, and they are affecting consumer spending, which accounts for 70 percent of the economy," said Pearl Kamer, chief economist at the Long Island Association. Still, she predicted the U.S. economy would not fall back into recession.

While gasoline spiked last month, the cost of electricity and natural gas used in homes fell 2.7 percent and 7.1 percent, respectively, compared with a year earlier. Restaurant and takeout meals cost 2.5 percent more while groceries were up 2.9 percent.

Excluding energy and food, the regional price index rose 1.6 percent in the past year.

The increases in the regional index differed from those in the national index. Prices climbed 3.6 percent across the country in May compared with a year ago. They were up 1.5 percent excluding food and energy.

Nationally, inflation was up 0.5 percent last month from April and 0.2 percent if food and energy are excluded. The latter measure, called core inflation, is a key number closely monitored by the Federal Reserve Bank's interest-rate-setting committee.

Separately, the state Taxation and Finance Department released data about shopping activity on Long Island. Sales tax receipts fell 1.6 percent in Nassau in May compared with a year ago, due in part to the end of a tax on home-energy purchases. In Suffolk, receipts soared 9.8 percent because the county had to refund money in 2010, a department official said.