US Annual Inflation Hit 4.2% in May, Highest in Three Years
Higher energy costs drove more than 60% of the monthly increase, and gasoline prices climbed $1.17 a gallon after the Iran war began.
- Consumer prices rose 4.2% from a year earlier, the Labor Department said Wednesday, marking the third straight increase and the highest level in three years.
- Spiking gas prices pushed inflation higher after Iran's closure of the Strait of Hormuz choked off oil supplies, raising pump costs from about $4.04 to $4.49, according to the Energy Information Administration.
- Higher inflation has put new Fed Chair Kevin Warsh in a difficult spot, while diesel fuel costs lifted shipping rates, forcing companies like UPS and FedEx to add fuel surcharges.
- Wall Street investors expect the Federal Reserve to raise interest rates, as Treasury securities increased following a jobs report showing hiring accelerated, signaling inflation may remain elevated.
- Gas prices have since fallen to $4.16 on average nationwide, according to AAA, which could lead to a cooler inflation reading in June, though President Donald Trump's sweeping tariffs continue affecting costs.
162 Articles
162 Articles
How energy costs drove inflation past 4% while core prices held steady
Inflation rose by 4.2% in May, driven largely by rising fuel prices due to near total closure of the Strait of Hormuz. It’s the highest annual increase in inflation since April 2023. Gasoline prices in May were up 40.5% from a year earlier and 7% compared with April, according to the latest Consumer Price Index (CPI) report. The average gasoline price nationwide sits at $4.15 per gallon on Wednesday, down from a May high above $4.50, but still …
The Toronto Star
US households, businesses stung by higher energy prices that have pushed inflation above 4%
WASHINGTON (AP) — Rising gas prices pushed inflation to its highest level in three years last month, a headache for the Federal Reserve and a potential political challenge for the Trump administration as midterm elections near.
US inflation hits highest level in three years
US inflation hit a three-year high of 4.2% in May, as the Iran war drove up energy prices. Core inflation, removing energy and food prices, inched up to 2.9%.“The frustration for many Americans is that so many of the basics are up in price right now,” an economist told CNBC, adding that ending the Iran war would ease inflation, but that food prices would continue to rise.The data bolsters the case for the US Federal Reserve to raise interest rat…
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