U.S. Inflation Climbs to Highest Level Since 2023

U.S. consumer prices accelerated in May, with annual inflation reaching its highest level since 2023 as energy costs continued to climb.

Core inflation — which excludes volatile food and energy costs — increased 2.9% annually and 0.2% from April.

According to data released by the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased 4.2% year-over-year in May, marking the strongest annual inflation reading since April 2023.

On a monthly basis, prices rose 0.5%, matching economists’ expectations.

Core inflation — which excludes volatile food and energy costs — increased 2.9% annually and 0.2% from April, slightly below expectations for monthly growth.

Economists say persistent energy costs and broader geopolitical tensions continue to weigh on inflation, complicating expectations for future interest-rate cuts by the Federal Reserve.