US CPI rises 4.2% in May as energy prices lift inflation

US consumer inflation hits fresh three-year high in May

WASHINGTON, United States (AFP) —  United States (US) consumer inflation surged to a fresh three-year high in May, according to official data released Wednesday, as increased energy prices rippled through the world's largest economy. The consumer price index (CPI) rose 4.2 per cent year-on-year, up from April's 3.8 per cent figure, the US Bureau of Labor Statistics said. It was the highest reading since April 2023, according to official data, but in line with analyst expectations. The US-Israel war against Iran, launched in late February, has sent energy prices soaring after Tehran retaliated by virtually closing the vital Strait of Hormuz, through which roughly a fifth of global oil and gas normally pass. US President Donald Trump has insisted that the price shock will be temporary and that a peace deal will be signed soon, but the soaring costs are a key issue for voters as they head to midterm elections in November. Trump's Republican Party will be aiming to maintain their control of both houses of Congress, but will face a stiff test as high prices batter US households. May's consumer inflation data showed energy prices had risen 23.5 per cent over the same time last year, with gasoline rising by 40.5 per cent. Grocery prices also rose significantly for the second month in a row, up 2.7 per cent over a year ago. Americans have been battered by years of higher-than-expected inflation, with price increases continuing to remain high long after the pandemic. Core consumer price index (CPI) inflation, which excludes volatile food and energy prices, came in at 2.9 per cent in May, up from 2.8 per cent the month before. The US Federal Reserve has a long-term two-per cent target for inflation, and the central bank's rate-setting committee will meet next week to set interest rates. Markets expect them to keep rates steady at this meeting, but are now pricing in rate hikes for later in the year, spooking equity investors.

14 hours ago

US consumer prices increase as expected in May

WASHINGTON — U.S. consumer inflation increased at its fastest pace in three years in May as the Middle East conflict raised the price of gasoline and other energy products, giving more ammunition for the Federal Reserve to keep interest rates unchanged into 2027. The Consumer Price Index (CPI) increased 4.2 percent in the 12 months through May, the largest gain since April 2023, the Labor Department's Bureau of Labor Statistics said on Wednesday. The CPI advanced 3.8 percent year-on-year in April. Prices increased 0.5 percent on a monthly basis after climbing 0.6 percent in April. Economists polled by Reuters had forecast the CPI increasing 4.2 percent year-on-year and gaining 0.5 percent on a monthly basis. The third straight month of strong increases in the CPI highlighted mounting pressure on households as evidence suggests more consumers are dipping into savings to finance their spending. Inflation outpaced wage growth for a second consecutive month, which could weigh on overall economic growth. The soaring cost of living is a political liability for President Donald Trump and his

17 hours ago