Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyU.S. inflation accelerates, though core gauge comes in softerThe consumer price index climbed 0.5% from April and 4.2% from a year earlierAuthor of the article:Last updated 1 hour ago You can save this article by registering for free here. Or sign-in if you have an account.Vegetables on display in a grocery store on August 15, 2025 in Delray Beach, Florida. Photo by Joe Raedle/Getty ImagesU.S. inflation accelerated in May to the fastest pace in more than three years as the Iran war pushed up energy prices, outstripping Americans’ pay gains.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe consumer price index climbed 0.5 per cent from April and 4.2 per cent from a year earlier, the most since early 2023, according to Bureau of Labor Statistics data out Wednesday. An underlying gauge of inflation that excludes food and energy, however, rose a less-than-expected 0.2 per cent from the prior month.More than half of the advance in the overall CPI was due to higher energy costs, though prices in some categories like transportation services, health insurance and new vehicles fell. That offers cold comfort for consumers who are already seeing price hikes eat into their paychecks.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againEven if there’s a resolution to the conflict soon, economists see more price increases on the horizon, which could prompt United States Federal Reserve officials to consider an interest-rate increase this year. Beyond the initial energy shock, disruptions to fertilizer markets may eventually lead to higher grocery bills, while rising transportation costs could boost prices for all kinds of consumer goods.S&P 500 futures pared losses after the release, while Treasury yields were little changed.The CPI report showed prices of household essentials, aside from gasoline, rose at a more muted pace in May. Grocery prices rose 0.1 per cent, while energy services costs, a category which includes utilities prices like electricity and natural gas, also advanced at a slower pace. Gasoline climbed seven per cent.A separate report Wednesday that combines the inflation figures with recent wage data showed that real average hourly earnings fell 0.7 per cent from a year earlier, the biggest drop in more than three years.The combination of higher prices and weaker pay gains is putting more stress on household budgets at a time when consumer sentiment is already at record lows, and will likely be front and center in November’s midterm elections. U.S. President Donald Trump’s approval ratings have slumped as Americans have soured on his handling of the economy, which he had previously counted as an area of strength.Wednesday’s report showed airfares rose 2.7 per cent in May, and delivery services costs posted a firm advance for a third month. Those are two categories economists have been watching to assess whether higher energy prices are starting to filter into core inflation.Prices for goods excluding food and energy, another category which may see a boost from the impact of the war, fell 0.1 per cent, the most in more than a year. Economists have also been keeping an eye on goods prices for signs as to whether retailers are still passing on costs from Trump’s tariffs.While used-car prices rose slightly, prices for new vehicles fell for a second month. Apparel prices continued to rise, though at a slower pace than in the last few months.A deceleration in rental inflation helped offset increases in other categories after it was boosted in April by a measurement quirk related to last year’s government shutdown. Owners’ equivalent rent, the largest component of the CPI, rose 0.3 per cent.With assistance from Julia Fanzeres and Maya Prakash Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.