May inflation surge as tariffs hit consumer prices
In May, inflation in the U.S. accelerated mainly due to rising commodity prices. Companies started passing the costs of higher tariffs onto consumers, which caused the index of commodity and service prices, excluding food and energy, to increase by 0.3 percent. This marks the highest rise in four months.
Tariffs are beginning to impact consumers. The increase in U.S. inflation in May was primarily driven by higher commodity prices, a consequence of transferring tariff costs to consumers.
According to data collected by Bloomberg, the index of commodity and service prices, excluding food and energy, rose by 0.3 percent in May, marking the highest increase in four months.
Forecasts indicate that the annual core inflation rate could reach 2.9 percent. This is the first such rise this year. Inflation reports and producer price data will be crucial for the Federal Reserve ahead of its June meeting, where the effects of trade policy on the economy will be discussed.
Despite pressure from President Donald Trump to lower interest rates, Fed Chairman Jerome Powell and his colleagues emphasize that they have time to assess the impact of tariffs on the economy.
The increase in jobless claims in May points to possible tensions in the labor market.
