Rising tariffs spark the highest US inflation in four months
In May, inflation in the US accelerated, primarily due to rising commodity prices. Companies began passing the costs of increased tariffs onto consumers, which contributed to a 0.3 per cent rise in the index of commodity and service prices, excluding food and energy. This marks the highest increase in four months.
Tariffs are impacting consumers. The rise in US inflation during May was largely attributable to higher commodity prices, driven by the transfer of tariff costs to consumers.
According to data compiled by "Bloomberg," the index of commodity and service prices, excluding food and energy, increased by 0.3 per cent in May, marking the highest rise in four months.
Projections suggest that the annual core inflation rate could reach 2.9 per cent. This is the first increase of this size this year. Inflation reports and producer price data will be vital for the Federal Reserve ahead of the June meeting, where they will discuss the effects of trade policy on the economy.
Despite pressure from President Donald Trump to reduce interest rates, Fed Chairman Jerome Powell and his colleagues stress that they have time to evaluate the impact of tariffs on the economy.
The rise in jobless claims in May suggests potential tensions in the labour market.
