U.S. May CPI Could Hit Highest Level in Over Three Years, Consumer Confidence and Purchasing Power Continues to Erode

June 10 — Economists expect a key U.S. inflation gauge, due out this Wednesday, will show that U.S. consumer prices rose in May at the fastest pace in over three years. Mark Zandi, chief economist at Moody’s Analytics, stated that unlike the inflation driven by COVID-19-era supply disruptions, the recent price surge is largely tied to government policies — including the Iran war. “It’s been nearly five years since inflation last hit the Federal Reserve’s target, and I believe that’s gradually eroded the public’s collective economic mindset, which is a key reason Americans feel so frustrated about the economy,” he said. A new CBS News survey finds three-quarters of Americans report their incomes aren’t keeping up with inflation. Economists note that May’s Consumer Price Index (CPI) data — the inflation gauge in question — signals rising energy prices as the primary driver of persistent inflation. Zandi added that beyond energy costs, Wednesday’s CPI release will also spotlight goods and services pricing to gauge how higher fuel costs are rippling through the broader economy. “It’s not just gasoline prices climbing,” he explained. “Diesel prices are also up, which pushes up costs for every truck-transported good — from groceries to Amazon packages. Air travel’s pricier too, as airlines pass those higher jet fuel costs onto passengers.”