WASHINGTON — U.S. consumer prices rose at the fastest annual pace in more than three years in May, with inflation climbing to 4.2 percent as energy costs surged amid the Middle East conflict, the Labor Department reported on Wednesday.
The Consumer Price Index increased 0.5 percent in May from the previous month after a 0.6 percent gain in April, the Bureau of Labor Statistics said. Over the 12 months through May, the all-items index advanced 4.2 percent, up from 3.8 percent in the year through April and marking the highest rate since April 2023.
Energy prices drove much of the acceleration, rising 23.5 percent over the past year compared with 17.9 percent in April. Gasoline prices jumped 40.5 percent, while fuel oil increased 58.9 percent, the agency said. Energy accounted for more than 60 percent of the monthly gain in the overall index.
Food prices rose 3.1 percent over the year, up from 2.3 percent previously. Shelter costs increased 3.4 percent, compared with 3.3 percent in the prior period.
Core inflation, which excludes volatile food and energy categories, rose to 2.9 percent annually from 2.8 percent, the highest since September 2025. The core index increased 0.2 percent in May.
The data comes as the Federal Reserve prepares for its next policy meeting. Officials have indicated they are monitoring the effects of higher energy prices linked to geopolitical tensions.
"Inflation has picked up due to energy costs," said a senior economist at a major financial institution, noting the impact of global supply disruptions. Details of broader policy responses remain under discussion.
The Trump administration has pointed to external factors for the rise while emphasizing efforts to boost domestic energy production. Critics have raised concerns about the broader effects on households and the potential for sustained pressure on prices.
Economists had expected the May figures to show the reported acceleration. Markets reacted with caution following the release, though trading conditions were fluid.
As of June 11, 2026, the full implications of the May inflation report continue to be assessed by policymakers and analysts. Additional economic data, including producer prices and employment figures, are scheduled for release in the coming weeks.
