May inflation likely topped 4% for first time in 3 years, economists say
Summary
U.S. consumer prices in May likely rose at their fastest rate in over three years, with inflation expected to hit about 4.2% annually. Higher energy costs, especially fuel prices, are driving much of this increase, while core inflation excluding food and gas rose more slowly.Key Facts
- The Consumer Price Index (CPI) for May is expected to show a 4.2% annual inflation rate, up from 3.8% in April.
- This would be the highest inflation rate since April 2023, when it was 4.9%.
- Core inflation, which excludes food and gas prices, is expected to have risen 2.9% annually in May, a slight increase from 2.8% in April.
- Inflation remains well above the Federal Reserve’s 2% target.
- Economists say recent inflation partly results from government policies and events like the Iran war, not just pandemic disruptions.
- Rising energy prices, especially for gasoline and diesel, are a major cause of inflation as they increase costs for goods and services.
- Gas prices in the U.S. have started to decline again, with the average gas price at $4.16 per gallon as of late May.
- Oil prices have also fallen, with Brent crude near $91 and West Texas Intermediate near $88 per barrel.
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