Inflation Climbs to 4.2% in May as Energy Prices Remain High " ¡Que Onda Magazine!

Inflation climbed to 4.2% in May, marking the highest level in more than three years as energy costs remained elevated amid Middle East tensions. Energy prices accounted for more than 60% of the monthly increase, with gasoline up 7% for the month and more than 40% higher than a year ago. Core inflation, excluding food and energy, rose 2.9% year over year and by 0.2% month over month, suggesting underlying pressures may be moderating. Several categories posted slower price growth, including car insurance down 1.7%, prescription drugs down 0.9%, and new vehicles down 0.3%. However, airline ticket prices increased 2.7%, reflecting higher transportation costs, while real wages fell for the second straight month. Economists warn that shrinking purchasing power could weigh on consumer spending and growth in the months ahead. The latest data arrives ahead of the Federal Reserve's next policy meeting, fueling questions about rate cuts as inflation remains sticky.