Inflation has surged to its highest level in three years, driven by rising energy costs and other goods due to the ongoing conflict in Iran, as detailed in the latest Department of Labor report released on Wednesday.
The Consumer Price Index (CPI), a key measure of inflation, climbed by 4.2 percent over the past year, with a 0.5 percent increase recorded in May alone.
This jump in the CPI aligns with Wall Street’s expectations and represents the first time it has exceeded 4 percent since May 2023, marking the highest rate since April of that year.
In May, energy prices experienced a 3.9 percent hike, following rises of 3.8 percent in April and 10.9 percent in March, contributing to over 60 percent of the overall monthly increase in consumer prices.
The Energy Information Administration noted that average gas prices reached $4.49 in mid-May, compared to $4.09 in mid-April. However, the national average has since decreased to $4.15 in June, according to AAA.
The price of fuel has kept increasing as peace talks between the U.S. and Iran drag out, likely threatened by the latest exchanges, which could threaten an already fragile two-month ceasefire.
The food index also saw an increase of 3.1 percent over the past year, with a 0.2 percent rise in May. All other items saw a nearly 3-percent increase in the last year after also rising by 0.2 percent in May.
The latest numbers are not likely to tamp down worries about the cost of living, a growing point of concern among many Americans, according to the latest polling.
President Trump said prior to the latest escalation with Iran that prices would drop as the conflict settles down. The closure of the Strait of Hormuz has effectively cut off around 20 percent of the world’s oil from being exported.
Experts have said, however, that even if the Strait of Hormuz soon reopened and fuel shipments passed through to their destinations, it would take time before prices decrease.
On Wednesday, Trump blamed Iran for stalled peace negotiations, though lawmakers excoriated the president after he told reporters that he does not “think about” Americans’ financial situations when negotiating with the Islamic regime.
The Labor Department’s latest report also marks another political blow to Trump and Republican lawmakers making the case for keeping Congress in GOP control in November.
Updated at 9:42 a.m. EDT