U.S. inflation accelerated in May, reaching its highest annual rate in more than three years as rising energy costs have pushed consumer prices higher, according to the new government data. This adds to the growing scrutiny the Trump administration faces over household costs amid ongoing conflict involving Iran.
The Consumer Price Index rose 4.2% from a year earlier in May, up from 3.8% in April. Economists cited higher energy prices as the primary driver of the increase, with fuel costs accounting for a significant share of the monthly gain. Core inflation, which excludes food and energy prices, remained lower at 2.9% annually.
READ: US consumer confidence falls as inflation worries grow (May 27, 2026)
When asked about the CPI number issued by the Bureau of Labor Statistics, President Donald Trump responded “No, I love it, the numbers were great.” He also linked the inflation increase to the conflict involving Iran and its impact on oil markets. During remarks with the reporters in the Oval Office at the White House, Trump argued that the rise in prices was tied to wartime conditions and higher energy costs. He went on to credit that actions taken by his administration had helped prevent oil prices from climbing even further.
The inflation report reflects the economic impact of rising fuel costs following disruptions in global energy markets. Analysts noted that energy prices contributed more than 60% of the monthly increase in consumer prices, while gasoline costs posted some of the largest gains.
Despite the jump in inflation, broader price pressures outside the energy sector remained more moderate. Core inflation increased at a slower pace than overall consumer prices, suggesting that much of the recent acceleration was concentrated in energy-related categories rather than across the economy.
READ: Consumer spending rose in March, driven largely by gas prices (April 21, 2026)
The higher inflation reading poses a political challenge for the administration, which has emphasized reducing costs for American consumers. Rising prices have become a key economic concern as households continue to face higher expenses for fuel and other necessities. Economists have also warned that sustained energy-price increases could place additional pressure on consumer budgets.
Financial markets closely monitored the inflation data as investors assessed the potential economic effects of higher prices and continued geopolitical tensions. At the same time, the labor market has remained relatively stable, providing some support for consumer spending despite the inflationary pressures.
The May report marks the fastest annual increase in consumer prices since 2023, showcasing the role energy costs continue to play in shaping the nation’s inflation outlook.