U.S. Inflation Tops 4% for First Time in Three Years on Gasoline Spike
Energy prices drove the increase as gasoline costs rose sharply. Wage growth has not kept pace, reducing consumer purchasing power.
pymnts.comU.S. consumer prices rose 4 percent in May from a year earlier, the fastest pace in three years, according to the latest Consumer Price Index data. Energy prices accounted for most of the increase, with gasoline prices climbing sharply.
The New York Times, Washington Post, NPR, New York Post and Semafor all reported the 4 percent year-over-year figure as the highest since 2023. Sources attributed the acceleration primarily to a spike in gasoline costs linked to the conflict involving Iran.
JPMorgan Chase consumer and community banking chief Marianne Lake said in a June 9 speech in New York City that the bank is watching consumer spending closely as inflation creeps up. Lake noted that a small group of households is already seeing salary increases fall short of inflation.
” Lake added that cash cushions built during the pandemic have diminished.
Goldman Sachs CEO David Solomon predicted that consumer behavior will shift in the second half of the year if price pressures continue to accelerate. Recent research from PYMNTS Intelligence found that 80 percent of households classified as pressure-driven cutback consumers reduced everyday spending last quarter. Only one in six said the spending cuts produced meaningful relief.
