Overview
- The Bureau of Labor Statistics reported on Wednesday that the Consumer Price Index rose 4.2% year‑over‑year in May, the fastest pace in three years.
- Energy costs drove the move with the BLS showing the energy index up 3.9% in May and gasoline up about 40.5% year‑over‑year, accounting for more than 60% of the monthly CPI increase.
- Real average weekly earnings fell 0.2% from April and 0.7% from a year earlier, signaling that wages are not keeping pace with rising prices and squeezing household budgets.
- President Donald Trump publicly said 'I love the inflation' when asked about the data and asserted unverified claims that U.S. efforts moved large volumes of oil through the Strait of Hormuz, a claim questioned by some officials and quickly criticized by Democratic leaders.
- Economists and markets now price in a longer period of elevated interest rates with the Federal Reserve under new chair Kevin Warsh facing pressure to act if energy‑driven price gains broaden into wider wage and price increases.