Inflation tops 4% for the first time in 3 years on spike in gasoline prices
Energy costs accounted for more than 60% of the monthly rise in the consumer price index in May.
Joe Raedle/Getty Images
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Joe Raedle/Getty Images
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Soaring gasoline prices, triggered by the U.S. war with Iran, have pushed inflation to its highest level in more than three years.
A report from the Labor Department on Wednesday showed consumer prices in May were up 4.2% from a year ago. That’s the biggest annual increase since April of 2023. By contrast, the Labor Department says average wages have risen only 3.4% over the last year, so workers’ real spending power has declined.
Prices rose 0.5% between April and May, with higher energy costs accounting for more than 60% of that monthly increase. Gas prices have jumped by well over a dollar a gallon since the war began, strangling shipping traffic in the Strait of Hormuz — a critical pathway for much of the world’s oil supply.
Higher fuel costs also pushed up airfares in May. Airline tickets cost about 27% more than they did a year ago.
Grocery prices showed little change during the month, rising just 0.1%. Stripping out volatile food and energy prices, “core inflation” was 2.9% for the 12 months ending in May, a slightly larger annual increase than the previous month.
Stubborn inflation makes it less likely the Federal Reserve will cut interest rates anytime soon, especially since the U.S. job market appears to be stabilizing. Employers added 172,000 jobs last month.
Gasoline prices have eased in recent days, amid hopes of a possible negotiated settlement between the U.S. and Iran. But with an average price of $4.15 a gallon nationwide, pump prices are still about $1.17 higher than they were before the war began, according to AAA.
So the bottom line is prices rose 0.5% between April and May, with higher energy costs accounting for more than 60% of that monthly increase. Wonder how this will land.
When you look at soaring gasoline prices, triggered by the U.S, the implications are hard to ignore.
The fact that energy costs accounted for more than 60% of the monthly rise in the consumer price index in May really puts things into perspective.
Energy costs accounted for more than 60% of the monthly rise in the consumer price index in May. Meanwhile soaring gasoline prices, triggered by the U.S.
Basically prices rose 0.5% between April and May, with higher energy costs accounting for more than 60% of that monthly increase. What matters is whether anything changes because of it.
The fact that higher fuel costs also pushed up airfares in May really puts things into perspective.
The bigger issue here is higher fuel costs also pushed up airfares in May. That changes the calculation.
The bigger issue here is soaring gasoline prices, triggered by the U.S. That changes the calculation.
The bigger issue here is prices rose 0.5% between April and May, with higher energy costs accounting for more than 60% of that monthly increase. That changes the calculation.
What stands out is a report from the Labor Department on Wednesday showed consumer prices in May were up 4.2% from a year ago. That is the part worth paying attention to.
So the bottom line is higher fuel costs also pushed up airfares in May. Wonder how this will land.
12 months — and that is probably just the official count.
Think about it: a report from the Labor Department on Wednesday showed consumer prices in May were up 4.2% from a year ago. That speaks volumes.
When you look at a report from the Labor Department on Wednesday showed consumer prices in May were up 4.2% from a year ago, the implications are hard to ignore.
If a report from the Labor Department on Wednesday showed consumer prices in May were up 4.2% from a year ago, then the bigger picture starts to look very different.