Inflation shot past 4% in May for the first time in three years as higher energy costs amid the war in Iran weighed on prices – likely keeping the Federal Reserve on hold next week when it comes to interest rates.
The Consumer Price Index rose 4.2% in May over the past 12 months – heating up from 3.8% in April as energy costs continued to soar, the Bureau of Labor Statistics said Wednesday.
The Fed is likely to pay attention to the core CPI figure, which excludes volatile food and energy prices – thus giving a better picture of the economy’s resilience amid temporary energy supply disruptions.
Core CPI hit 2.9% in May over the past 12 months, rising 0.2% over the month – indicating higher energy costs are seeping into the broader economy, raising prices for consumer goods and services like food and airfare.
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