{"id":493112,"date":"2026-06-10T21:07:15","date_gmt":"2026-06-10T21:07:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/493112\/"},"modified":"2026-06-10T21:07:15","modified_gmt":"2026-06-10T21:07:15","slug":"us-inflation-jumps-to-4-2-in-may-amid-middle-east-energy-shock-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/493112\/","title":{"rendered":"US inflation jumps to 4.2% in May amid Middle East energy shock \u2013 The Irish Times"},"content":{"rendered":"

US<\/a> inflation jumped to a new three-year high of 4.2 per cent in May as US president Donald Trump<\/a>\u2019s Middle East war<\/a> drives up energy prices for Americans.<\/p>\n

Wednesday\u2019s figure from the Bureau of Labor Statistics (BLS) was in line with expectations from a Bloomberg poll of economists and up from April\u2019s year-on-year rate of 3.8 per cent.<\/p>\n

Price pressures have risen sharply since the conflict began in late February, when inflation sat at just 2.4 per cent.<\/p>\n

Fuel prices<\/a> continued to underpin inflation in May, with the cost of petrol up by about 50 per cent since the war began according to the BLS, as Iran\u2019s closure of the Strait of Hormuz<\/a> creates an energy crunch that has reverberated around the global economy.<\/p>\n

\u201cThe longer the Middle East conflict persists, the broader and more persistent inflationary pressures are likely to become,\u201d said Gregory Daco at EY Parthenon.<\/p>\n

Americans have grown increasingly frustrated with Trump over the economic impact of the conflict. A Financial Times poll released this week found that 68 per cent of voters disapproved of his handling of inflation and the cost of living<\/a>, up 10 points from April.<\/p>\n

[\u00a0OECD warns of \u2018dark scenario\u2019 if Gulf energy crisis drags onOpens in new window<\/a>\u00a0]<\/p>\n

Erik Gordon, a professor at the University of Michigan\u2019s Ross School of Business said concerns over inflation had helped Trump win the presidency in 2024, but could cost the president\u2019s party in November\u2019s midterms.<\/p>\n

\u201cMr Trump won on inflation and might be leading the Republicans to defeat on inflation,\u201d he said.<\/p>\n

The inflationary burst from the Iran conflict has also spilled into other parts of the US economy as the cost of transporting goods escalates.<\/p>\n

\"\"\u2018No profit and crap governance\u2019 \u2013 is Elon Musk\u2019s SpaceX actually worth $1.75 trillion?<\/p>\n

\u201cEnergy remains firmly in the driving seat for US inflation, but there is a growing danger that a broader set of prices start to grab the steering wheel,\u201d said George Brown, senior economist at Schroders.<\/p>\n

Food prices were up 3.1 per cent versus the previous year, with products such as coffee, fruit and vegetables and baked goods all climbing. But some other groceries that had risen sharply in recent months, such as dairy, meat and eggs, fell slightly.<\/p>\n

Still, core inflation, which strips out volatile food and energy prices, only ticked up moderately to 2.9 per cent from 2.8 per cent the previous month, suggesting the inflationary fallout in the wider economy remained muted.<\/p>\n

Seema Shah, chief global strategist at Principal Asset Management, said the data showed that the US economy was not yet displaying a \u201cclear sign of broader second-round effects\u201d from energy prices. \u201cThis should allow the Fed to remain patient,\u201d she added.<\/p>\n

The inflation data comes days after a strong employment report that suggested the US jobs market had begun to stabilise after a rocky 2025.<\/p>\n

Federal Reserve officials have voiced concern over the price growth, with some suggesting the central bank should remove its bias towards lower rates at its meeting next week, a view bolstered by signs of recovery in the jobs market. Investors are betting policymakers will be forced to raise borrowing costs before the end of the year.<\/p>\n

The dollar and treasuries were little changed after Wednesday\u2019s data release. The two-year treasury yield was down 0.01 percentage points at 4.12 per cent, while the greenback was down 0.1 per cent on the day against a basket of its peers.<\/p>\n

Traders continued to price in a quarter-point rise to the Fed\u2019s benchmark rate by the end of the year, according to levels implied by futures contracts.<\/p>\n

The S&P 500 wavered in early trading in New York. Stock futures had clawed back some of their losses on the data, with contracts linked to the index down 0.8 per cent before its release. \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"US inflation jumped to a new three-year high of 4.2 per cent in May as US president Donald…\n","protected":false},"author":2,"featured_media":493113,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,969,113,37635,61,60,150177,115],"class_list":["post-493112","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-donald-trump","tag-economy","tag-energy-crisis","tag-ie","tag-ireland","tag-strait-of-hormuz","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/493112","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=493112"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/493112\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/493113"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=493112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=493112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=493112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}