US Core Inflation Hits Seven-Month High

The US core inflation rate, excluding volatile food and fuel costs, climbed to 2.9% year-over-year in May 2026, matching market forecasts and reaching its highest level since September 2025. Key drivers included shelter (+3.4%), transportation services (+4.1%), medical care services (+3.6%), and apparel (+4.8%), while used cars and trucks (-2.0%) and medical care commodities (-1.8%) declined. Month-over-month, core consumer prices rose 0.2% in May, following a 0.4% increase in April, slightly below expectations of 0.3%.

The annual core inflation rate in the United States, which excludes food and energy, rose to 2.8% in April of 2026 from 2.6% in the previous month, slightly above market expectations of 2.7%. It was the sharpest core inflation rate since September of last year. Prices rose sharply for services less energy services (3.3%) amid higher costs for shelter (3.3%) and transportation services (4.3%). IN turn, prices rose sharply for apparel (4.2%), while they fell rose less for new vehicles (0.2%) and tumbled for used cars and trucks (-2.7%). From the previous month, core consumer prices rose by 0.4%, the sharpest increase since January 2025.

The annual core inflation rate in the United States, which excludes food and energy, rose to 2.6% in March of 2026 from 2.5% in the previous two months, slightly below market expectations that it would have risen to 2.7%. Inflation was high for services that exclude energy services (3%), including shelter (3%), transportation services (4.1%), and medical care services (3.7%). Meanwhile, commodities less food and energy inflation was at 2.6%, as higher rates for apparel (3.4%) offset the decline in price of used cars and trucks (-3.2%).