US consumer prices rise in May, driven largely by higher energy costs associated with the Iran conflict, according to Bloomberg. The overall consumer price index (CPI) increases 4.2% from a year earlier, the largest year-over-year gain since early 2023. In addition, inflation accelerates during the month as energy prices move higher.
At the same time, measures of underlying inflation come in softer than expected. Bloomberg reports that the core CPI—excluding food and energy—rises 0.2% from April and increases 2.9% from a year earlier. One report characterizes the core underlying gauge as increasing less than forecasts, while another describes the core CPI as softening relative to what markets were anticipating.
Taken together, the data show a faster pace for headline inflation in May, but a more muted trend for core prices, suggesting that the acceleration is concentrated more in volatile categories such as energy rather than across the broader cost base.
