BLS: U.S. Inflation at 4.2% in May as Energy Costs Persist


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- U.S. headline inflation, indicated by the Consumer 
Price Index (CPI), rose for a third straight month to reach an annual rate of 
4.2% in May amid surging energy costs related to the Iran war, Bureau of Labor 
Statistics (BLS) data showed Wednesday.

   The annualized CPI reading marked a significant jump from the 3.8% pace 
recorded in April. The acceleration further distances inflation from the 
Federal Reserve's long-term 2% target, cementing expectations that current 
interest rates will remain unchanged.

   Core inflation, which excludes volatile food and energy tracking, moved up 
to 2.9% on a yearly basis. That figure edged above the 2.8% rate seen in April, 
compounding the policy challenges facing the central bank.

   The energy index rose 3.9% over the month, accounting for over 60% of the 
total monthly increase in consumer prices. This advancement was led by a 7.0% 
spike in gasoline prices, pushing the 12-month energy index up 23.5%.

   Higher operational expenses continued to seep into the service sector, 
keeping transportation costs elevated ahead of peak summer demand. Airline 
fares climbed 2.7% during the month, contributing to a substantial annual 
increase across the broader travel segment.

   The monthly food index trended up 0.2% in May, showing a slower pace of 
growth compared to the 0.5% increase logged in April. Gains were led by a 0.6% 
rise in nonalcoholic beverages and a 0.2% increase in fruits and vegetables.

   Meanwhile, the shelter index increased 0.3% over the month, maintaining 
consistent upward pressure on core consumer components. The June CPI data 
release is scheduled for publication on July 14.




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