US Annual Inflation Hit 4.2% in May, Highest in Three Years
Higher energy costs drove more than 60% of the monthly increase, and gasoline prices climbed $1.17 a gallon after the Iran war began.
- Consumer prices rose 4.2% from a year earlier, the Labor Department said Wednesday, marking the third straight increase and the highest level in three years.
- Spiking gas prices pushed inflation higher after Iran's closure of the Strait of Hormuz choked off oil supplies, raising pump costs from about $4.04 to $4.49, according to the Energy Information Administration.
- Higher inflation has put new Fed Chair Kevin Warsh in a difficult spot, while diesel fuel costs lifted shipping rates, forcing companies like UPS and FedEx to add fuel surcharges.
- Wall Street investors expect the Federal Reserve to raise interest rates, as Treasury securities increased following a jobs report showing hiring accelerated, signaling inflation may remain elevated.
- Gas prices have since fallen to $4.16 on average nationwide, according to AAA, which could lead to a cooler inflation reading in June, though President Donald Trump's sweeping tariffs continue affecting costs.
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Inflation in the United States rose to 4.2% in May, the highest level since the beginning of 2023, according to the report published on June 10 by the Bureau of Labor Statistics (BLS).The figure was 0.5 percentage points above 3.8% recorded in April and exceeds the wage growth, which is located at 3.4% per year.This difference means that the purchasing power of workers fell for the second consecutive month.The main engine of the increase is the …
Ringgit closes slightly higher against US dollar, major currencies
KUALA LUMPUR: The ringgit ended slightly higher against the greenback and other major currencies on Thursday, shrugging off the impact of stronger-than-expected US inflation data for May. At 6pm, the local currency inched up to 4.0650/4.0690 versus the greenback from yesterday’s close of 4.0670/4.0715. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit held steady at the RM4.06 level despite the US consumer price index …
Next week, the new Fed leader will decide on America's future interest rate policy. For months, US President Trump had aggressively pushed for a reduction, but it is coming to the distance due to the renewed inflation shock – triggered by Trump's own policy.
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