Prices have been rising in recent weeks, driven in large part by fuel costs surging from the ongoing Iran war.
The latest inflation report from the Department of Labor shows that prices continue to rise at an accelerated rate in 2026, driven by fuel increases as well as broader pressures on Americans’ pocketbooks.
According to the Bureau of Labor Statistics , consumer prices rose by 0.5 in May, slowed from 0.6 percent in April, with annual inflation accelerating to 4.2 from 3.8 percent in April, both in line with consensus forecasts. This marks its fastest year-over-year pace since April 2023—as well as through both of PresidentThe increase was once again driven by spiking fuel costs, the BLS said, with the energy index rising 3.9 percent in May and 23.5 percent over the past 12 months.
This accounted for more than 60 percent of all monthly increases in May, according to the agency. The food at home category—the amount paid for groceries—rose 0.1 percent in May, with the shelter index— essentially the cost of occupying a home—rising by 0.3 percent.
As well as headline inflation, core inflation, which strips out the more volatile energy and food categories, reached 0.2 percent on a monthly basis last month, down from 0.4 percent in April, and rose to 2.9 percent from 2.8 percent annually. This compares to the 0.3 percent and 2.9 percent, respectively, that was forecast by analysts.in last week’s employment report, the reading also weakens the odds that the Federal Reserve—now under the chairmanship of Trump nominee Kevin Warsh—will cut rates at its upcoming meeting later in June or subsequent meetings in 2026.
“Following last week’s stronger-than-expected jobs report, investors have become increasingly concerned that inflation may remain too persistent for the Fed to maintain a neutral stance,” Daniela Hathorn, senior market analyst at Capital.com, wrote prior to the release. “The labour market continues to show resilience, reducing the urgency for policymakers to support growth and instead shifting attention back toward inflation control.
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