Inflation tops 4% for the first time in 3 years on spike in gasoline prices

U.S. inflation accelerated in May to 4.2 percent, the highest pace in over three years, driven largely by gasoline and energy costs. The Labor Department reported 4.2% year-over-year inflation, while wages rose 3.4%, eroding real purchasing power. Prices edged up 0.5% from April to May, with energy accounting for more than 60% of that gain as fuel costs surged. Gasoline prices have climbed by more than a dollar per gallon since the conflict with Iran began, contributing to higher airfares and shipping costs. The labor market added 172,000 jobs in May, helping keep pressure on the Federal Reserve to consider policy changes carefully. Gas prices have since eased slightly, but the national average remains about $4.15 per gallon, roughly $1.17 higher than a year ago. Core inflation, excluding food and energy, rose 2.9% over the past year and posted a 0.2% monthly gain in May, signaling persistent pressures even as energy-driven spikes ease. With inflation stubborn and the job market steady, a further delay in Federal Reserve rate cuts seems likely.