U.S.-Iran ceasefire announced as oil prices fall below $80

President Donald Trump announced plans to sign a ceasefire agreement between the United States and Iran. Crude prices fell below $80 per barrel for the first time since March after the announcement. The agreement is expected to ease pressure on energy prices, a major contributor to recent inflation.

Prices increased 0.5 percent in May alone. The Producer Price Index showed inflation rising 0.8 percentage points to 6.5 percent for the year ending in May, according to the Bureau of Labor Statistics. Core inflation, which excludes food and energy, increased 0.1 percentage points to 2.9 percent.

The economy added 172,000 payroll jobs in May, exceeding expectations, the Bureau of Labor Statistics reported. The unemployment rate held at 4.3 percent. Job openings rose from 6.9 million in March to 7.6 million in April, the highest level since May 2024.

Economists had expected little change in the figure. Desmond Lachman, a senior fellow at the American Enterprise Institute, said uncertainty remains over whether the deal will hold and whether oil prices could rise again. Dennis Lockhart, former president of the Federal Reserve Bank of Atlanta, said the central bank had an inflation problem before the hostilities and that economic conditions still point to prioritizing inflation control.

Ryan Young, senior economist at the Competitive Enterprise Institute, said oil prices are likely to stay elevated at least into 2027 because infrastructure damaged during the conflict will take time to rebuild. Jamie Cox, managing partner at Harris Financial Group, noted that supply effects from the conflict will persist due to lags in oil flows and the need to refill the Strategic Petroleum Reserve.