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Inflation tops 4% for the first time in 3 years on spike in gasoline prices
TL;DR
Inflation has reached 4.2% for the first time in three years, driven by rising gasoline prices due to the U.S. war with Iran. Energy costs accounted for over 60% of the increase in the consumer price index in May.
Key points
- Inflation reached 4.2% in May 2023
- Gasoline prices spiked due to the U.S. war with Iran
- Energy costs contributed over 60% to the inflation rise
Energy costs accounted for more than 60% of the monthly rise in the consumer price index in May. Joe Raedle/Getty Images North America
Joe Raedle/Getty Images North America
Soaring gasoline prices, triggered by the U.S. war with Iran, have pushed inflation to its highest level in more than three years.
A report from the Labor Department Wednesday showed consumer prices in May were up 4.2% from a year ago. That's the biggest annual increase since April of 2023.
Prices rose 0.5% between April and May, with higher energy costs accounting for more than 60% of that monthly increase. Gas prices have jumped by well over a dollar a gallon since the war began, strangling shipping traffic in the Strait of Hormuz — a critical pathway for much of the world's oil supply.
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Q&A
What caused the recent spike in inflation to over 4%?
The spike in inflation to 4.2% was primarily caused by soaring gasoline prices linked to the U.S. war with Iran.
How much did energy costs contribute to the inflation increase in May?
Energy costs accounted for more than 60% of the monthly rise in the consumer price index in May.
When was the last time inflation reached over 4% before this report?
Inflation had not exceeded 4% since April 2023, making this the highest level in over three years.
