The U.S. Consumer Price Index rose 4.2% year-on-year in May, while core inflation — excluding fuel and food — stood at 2.9%, according to data reported by The Zioneer. Gasoline prices surged 40.5% from a year ago, and real income fell 0.7% as wage growth lagged behind price increases.
The latest CPI data confirms a sharp acceleration in U.S. inflation, reaching 4.2% in May — the highest level in three years, according to the Bureau of Labor Statistics figures cited in the report. Core inflation, a key measure watched by the Federal Reserve, rose 2.9%. The report attributes the surge primarily to energy costs: gasoline prices jumped 40.5% from May 2025, reflecting the global energy crisis linked to tensions in the Persian Gulf. Real income contracted 0.7% year-on-year, indicating that wage growth has failed to keep pace with price increases. The data follows a trend The Zioneer has tracked: inflation stood at around 3.8% earlier in the spring, and the energy component has been the primary driver since the Gulf crisis escalated in late April. The May reading reinforces pressure on the Federal Reserve to maintain or raise interest rates, and on the White House as fuel prices remain a central political vulnerability. Unlike the 2021-2022 inflation cycle, this spike is concentrated in energy and transport rather than broad-based demand, complicating the policy response.
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