US Inflation Rate Slows More Than Expected

The annual inflation rate in the US rose to 4.2% in May 2026, marking its highest level since April 2023, from 3.8% in April and in line with market expectations. This represents the third consecutive monthly acceleration in headline inflation, with energy costs jumping 23.5% (vs 17.9% in April), due to the energy shock triggered by the conflict with Iran. Gasoline prices soared 40.5%, after a 28.4% gain. Fuel oil also increased 58.9% (vs 54.3%). In addition, inflation accelerated once again for shelter (3.4% vs 3.3%) and food (3.1% vs 2.3%). Compared to the previous month, the CPI was up 0.5%, slightly less than 0.6% in April, and in line with forecasts. Energy prices rose 3.9% and accounted for over 60% of the monthly gain. Meanwhile, the annual core inflation rate went up to 2.9%, a new high since September 2025, compared to 2.8% in April and matching forecasts. Compared to the previous month however, the core CPI rose 0.2%, less than 0.4% in April and below forecasts of 0.3%.

The annual inflation rate in the US is expected to rise to 4.2% in May 2026, marking its highest level since April 2023, from 3.8% in April. This would represent the third consecutive monthly acceleration in headline inflation, driven largely by higher gasoline prices following the energy shock triggered by the conflict with Iran. However, the broader pass-through to consumer prices is expected to remain relatively limited. On a monthly basis, consumer prices are projected to increase by 0.5% in May, following a 0.6% rise in April. Gasoline prices likely went up around 9%, but the fading impact of a one-off adjustment to rent data should have a moderating effect on inflation. Meanwhile, core inflation, which excludes volatile food and energy prices, is expected to edge up to 2.9% year-on-year, a fresh-high since September 2025, from 2.8% in April. On a monthly basis, core consumer prices are estimated to have risen by 0.3%, after increasing 0.4% in the previous month.

The annual inflation rate in the US accelerated to 3.8% in April 2026, the highest since May 2023, and compared to 3.3% in March. Figures came above forecasts of 3.7% as the oil shock triggered by the war with Iran continues to push prices higher. Energy costs jumped 17.9%, the steepest annual increase since September 2022, compared to 12.5% in March, mostly due to gasoline (28.4% vs 18.9%) and fuel oil (54.3%). Inflation also accelerated for shelter (3.3% vs 3%) and food (2.3% vs 2.7%). Compared to the previous month, the CPI was up 0.6%, easing from the 0.9% rise recorded in March, which was the largest monthly gain since June 2022, and in line with forecasts. Core inflation rate also edged higher, albeit at a more moderate pace, to 2.8% year-on-year, the highest level since September, from 2.6% in March and above forecasts of 2.7%. On a monthly basis, core consumer prices increased by 0.4%, up from 0.2% in both February and March and forecasts of 0.3%.