{"id":154092,"date":"2026-06-10T14:37:33","date_gmt":"2026-06-10T14:37:33","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/154092\/"},"modified":"2026-06-10T14:37:33","modified_gmt":"2026-06-10T14:37:33","slug":"us-inflation-tops-4-for-the-first-time-in-3-years-as-americans-get-squeezed-by-high-gas-prices","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/154092\/","title":{"rendered":"US inflation tops 4% for the first time in 3 years as Americans get squeezed by high gas prices"},"content":{"rendered":"

WASHINGTON (AP) \u2014 Rising gas prices<\/a> pushed inflation to its highest level in three years last month, a headache for the Federal Reserve and a potential political challenge for the Trump administration as midterm elections<\/a> near. <\/p>\n

Consumer prices rose 4.2% in May from a year earlier, the Labor Department said Wednesday, up from 3.8% in April and the third straight monthly increase. On a monthly basis, prices rose 0.5% last month, after big gains of 0.6% in April and 0.9% in March. <\/p>\n

Prices have now risen faster than wages for several months, pressuring many Americans\u2019 finances and causing consumers to take a decidedly dim view<\/a> of the economy. Families are dipping into savings to maintain their spending, and more people are falling behind on their credit card bills. Large retailers say they have also noticed changes in customer behavior,<\/a> like buying smaller amounts of gas during visits to the pump.<\/p>\n

Inflation is now well above the Federal Reserve\u2019s 2% target, which it has surpassed for more than five years. New Fed chair Kevin Warsh<\/a> will preside over his first policy meeting next week, when the central bank is expected to keep its key interest rate unchanged. But the Fed is also likely to change the statement it issues after each meeting to remove a suggestion that its next move could be to lower rates. With inflation proving stubborn, financial markets expect it could instead raise rates by the end of the year. <\/p>\n

When the Fed lifts rates, over time it can make mortgages, auto loans, and business borrowing more expensive.<\/p>\n

Outside energy costs, price increases last month were not as dramatic, a sign that sharply higher inflation hasn\u2019t yet spread throughout the economy. Should the Iran war<\/a> end and oil and gas prices decline, headline inflation could begin to cool. Gas prices have fallen this month, though they remain elevated. <\/p>\n

Excluding the volatile food and energy categories, core prices rose at a more modest pace. On a monthly basis, they climbed just 0.2%, down from a 0.4% gain in April. Compared with a year ago, they have rise 2.9%, up from 2.8% in April. <\/p>\n

Still, many goods and services rose in price last month: Clothing costs increased 0.3% and are 4.8% more expensive than a year ago. Airline fares, pushed higher by pricier jet fuel, jumped 2.7% just in May and are nearly 27% higher than a year ago. Electricity prices rose 0.6% in May and are up 5.9% in the past year.<\/p>\n

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Grocery prices were tamer in May compared with previous months, rising just 0.1% from April. Still, they are up 2.7% from a year ago and have risen sharply since the pandemic. <\/p>\n

\u201cI don\u2019t think we\u2019re anywhere near out of the woods yet,\u201d Omair Sharif, chief economist at Inflation Insights, said. Price increases \u201cwere stronger under the hood.\u201d <\/p>\n

When the cost of nearly everything is rising, economists call it inflation. Even if paychecks also rise, inflation typically leads people feel like it\u2019s harder to make ends meet, and it often becomes a major political issue.<\/p>\n

Sharif and other economists point out that the cost of many services, including child care, home health care, and dental services are still rising much more quickly than is consistent with the Fed\u2019s 2% inflation target. <\/p>\n

Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, attributed some of the gain to a crackdown on immigration, which has likely forced many employers in those industries to raise wages. <\/p>\n

Inflation<\/a> had been cooling before President Donald Trump imposed sweeping tariffs in April 2025, which lifted the costs of many goods. Prices have since surged after the Iran war made oil and gas more expensive, making affordability a key political issue.<\/p>\n

Gas prices rose in May because of Iran\u2019s closure of the Strait of Hormuz, which has choked off about a fifth of the world\u2019s oil supply. Prices at the pump rose, on average, from about $4.04 in mid-April to $4.49 in mid-May, according to the Energy Information Administration. <\/p>\n

They have since fallen back to $4.16 on average nationwide, according to AAA, which could lead to a cooler inflation reading in June. That doesn\u2019t mean gas prices are not on the minds of most Americans. A gallon of gas has hovered above $4 a gallon since March. <\/p>\n

More expensive diesel fuel has lifted shipping costs, with companies like UPS and FedEx adding fuel surcharges<\/a> in the past couple of months. That is likely to push up grocery prices, which jumped 0.7% in April and are 2.9% higher than a year ago. <\/p>\n

Stubbornly high inflation has shifted the debate among Fed policymakers, who had signaled at the start of the year that they were inclined to cut their key rate twice more this year. Now, more officials are saying they expect the Fed\u2019s next move will likely be a hike rather than a cut.<\/p>\n

Despite higher inflation, the job market appears to be improving, with hiring increasing to a healthy level in May<\/a>, and the economy is still growing. These positive signs suggest the Fed doesn\u2019t need to cut rates to stimulate growth and hiring. They also signal that the Fed\u2019s rate isn\u2019t so high that it is weighing on the economy. Yet some officials want rates to cool growth a bit, because that can bring down inflation. <\/p>\n

Higher inflation has put Fed Chair Warsh in a difficult spot. He advocated for rate cuts last year and was chosen by Trump to replace Jerome Powell, after Trump relentlessly criticized Powell for not reducing rates more quickly. Yet for now, Trump and White House officials are mainly arguing that interest rates don\u2019t need to increase, rather than demanding further cuts. <\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 Rising gas prices pushed inflation to its highest level in three years last month, a…\n","protected":false},"author":2,"featured_media":154093,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3],"tags":[49238,328,38,2446,2443,2276,780,998,197,2437,1004,34,196,4367,4366,2222,782,20089,323],"class_list":["post-154092","post","type-post","status-publish","format-standard","has-post-thumbnail","category-iran","tag-bill-adams","tag-business","tag-donald-trump","tag-economic-indicators","tag-economic-policy","tag-energy-markets","tag-federal-reserve-system","tag-fedex-corp","tag-general-news","tag-inc","tag-inflation","tag-iran","tag-iran-war","tag-jerome-powell","tag-kevin-warsh","tag-oil-and-gas-industry","tag-u-s-news","tag-united-parcel-service","tag-united-states-government"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116726323095480827","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/154092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=154092"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/154092\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/154093"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=154092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=154092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=154092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}