ExclusiveUS Inflation Surges to 4.2% in May, Highest Level Since Early 2023

Inflation surged in May to 4.2 percent, the highest level since early 2023 as Iran war-related fuel costs worked their way through the broader economy. The month-to-month rate is 0.5 percent. The jump was mostly driven up by the soaring energy prices after the Iran war, with consumers paying gasoline almost 40 percent more on average than they did before the war began. The index for energy rose 3.9 percent in May after rising 3.8 percent in April and 10.9 percent in March, and the energy index accounted for over 60 percent of the overall numbers rise, the U.S. Bureau of Labor Statistics said. Core inflation, which excludes food and energy, rose 2.9 percent from last year. Substantial price increases were also recorded in communication, airline fares, medical care, personal care, and recreation. However, prices decreased in motor vehicle insurance, household furnishings and operations, and new vehicles.