Inflation Reaches 4.2% in May, Highest in Three Years
8 reported
Consumer price inflation reached 4.2% in May, the highest mark in three years, according to federal numbers released on Wednesday. The increase was largely boosted by higher energy prices, which have spiked because of the Iran war, the article reports. The year-over-year inflation rate is more than double the Federal Reserve’s target rate of 2%, dimming hopes for a cut in the interest rate. The core inflation rate, which excludes volatile food and fuel costs, was 2.9%. The conservative-leaning American Enterprise Institute stated that “Trump’s war of choice in Iran, coupled with his reckless budget and import tariff policies, offer strong arguments against the appropriateness of an interest rate cut at this juncture.” A June 1 report from Moody’s Analytics indicated that the costs of the Iran war have already outstripped recent economic benefits from bigger tax refunds under the Trump administration. The largest cost increases in the past year were for fuel oil, up 58.9%, and gasoline, up 40.5%.
What’s reported
Consumer price inflation reached 4.2% in May, the highest in three years.
The increase was largely boosted by higher energy prices due to the Iran war.
The core inflation rate (excluding food and fuel) was 2.9%.
Apparel costs rose 4.8%; transportation services costs rose 4.1%.
Fuel oil costs increased 58.9% and gasoline costs increased 40.5% over the past year.
Used car and truck prices decreased 2%; medical care commodities decreased 1.8%.
Overall inflation was highest in the Northeast and Midwest at 5%, and lowest in the West at 3.5%.
The highest metro area rates were 5.1% for Honolulu, Hawaii, and the New York City area.
Key figures
Mark Zandi, chief economist for Moody’s Analytics
American Enterprise Institute (conservative-leaning think tank)
Tim Henderson, Stateline reporter
Sources: stateline.org
