WASHINGTON, D.C. — Today, the Bureau of Labor Statistics announced that inflation, as measured by the consumer price index (CPI) on all items, increased by 4.2% for the 12 months ending in May, above last month’s 3.8% reading but in line with economists’ expectations. From April to May, the inflation rate decreased to 0.5% from 0.6%.
Core inflation, which excludes volatile energy and food prices, rose 0.2% in May and increased slightly at a pace of 2.9% year-over-year in May, from 2.8% in April.
Energy prices increased 3.9%, and gasoline prices rose 7.0% last month due to the conflict in Iran. New vehicle prices, however, fell 0.3%. Meat prices also decreased 1.1% in May.
Real average hourly earnings for all private-sector workers dropped in May, down 0.7% over the past year.
Patrice Onwuka, vice president for economic policy at Independent Women, issued the following statement:
“Headline inflation is up again in May, crossing the 4% threhold, but the blame is almost entirely on the Iran war. In April, gas prices drove 40% of inflation, and in May, that accelerated to 60% of price increases. That’s positive, because it signals that price hikes are not spreading widely across the economy, apart from at the gas pump and some grocery store items due to higher diesel prices.
“Energy prices are already headed in the right direction again. A gallon of gas has fallen about 20 cents over the past two weeks to $4.15 and is down from $4.53 a month ago. Americans are noticing, too, as consumers in two dozen states are paying below $4 a gallon today. When the Iran conflict ends, prices will fall quickly without widespread damage across the economy.
“The U.S. economy is stable. Americans are resilient and still spending, powering economic growth. The Working Families Tax Cuts (also known as the One Big, Beautiful Bill Act) provided a needed cushion with big tax refunds, up 11% on average at $3,400. Take-home pay has been boosted by about $2,340 for a typical family, which gives a bit more breathing room to absorb higher gas prices.
“As conservatives in Congress and President Trump mull over how to provide more relief to families and workers right now, they must not lose sight of long-term solutions to affordability, including deregulation in housing and other sectors. Less regulation will spur more competition—from home building to child care—to bring down prices and help households’ income go far.”
###
Independent Women’s unique, persuasive methods and trusted brand shape public preferences, policies, and movements to create a better future for everyone.
Independent Women’s Center for Economic Opportunity aims to educate the public about how government policies impact people’s opportunities for economic development and upward mobility.
