Consumer prices rose 0.5% in May, pushing the annual inflation rate to 4.2%, the highest level since 2023.
Energy costs accounted for more than 60% of the monthly increase, led by a 7% jump in gasoline prices.
Shelter, airline fares, medical care, and communication services also increased, while motor vehicle insurance and household furnishings declined.
Inflation accelerated again in May, as higher energy prices pushed consumer costs sharply higher, according to the latest Consumer Price Index report by the Bureau of Labor Statistics.
The CPI rose 0.5% in May after increasing 0.6% in April. Over the past 12 months, prices climbed 4.2%, up from a 3.8% annual rate in April.
Energy was by far the biggest driver of inflation. The energy index increased 3.9% during the month and accounted for more than 60% of the overall increase in consumer prices.
Gasoline prices posted one of the largest increases, rising 7.0% on a seasonally adjusted basis in May after increasing 5.4% in April. Fuel oil prices rose another 3.8%, while electricity prices increased 0.6%. Natural gas was one of the few energy categories to decline, falling 0.5%.
Over the past year, energy prices have surged 23.5%, with gasoline prices up 40.5% and fuel oil prices nearly 59% higher than a year ago.
Housing costs add to the pain
Housing costs continued to put upward pressure on inflation. The shelter index rose 0.3% in May, with rents increasing 0.4% and owners' equivalent rent climbing 0.3%. Shelter costs were up 3.4% over the past 12 months.
Food prices increased 0.2% during the month. Grocery prices rose 0.1%, while restaurant prices increased 0.3%.
Among grocery categories, nonalcoholic beverages posted one of the largest gains, increasing 0.6%, as coffee and tea prices rose 1.1%. Cereals and bakery products increased 0.4%, while fruits and vegetables rose 0.2%.
Where prices fell
Some food categories moved lower. Dairy products fell 0.6%, led by a 2.9% decline in cheese prices. The index for meats, poultry, fish, and eggs slipped 0.2%.
Excluding food and energy, so-called core inflation rose a more moderate 0.2% in May and was up 2.9% from a year earlier.
Several service categories recorded notable increases. Airline fares jumped 2.7%, communication services rose 1.3%, personal care costs increased 1.0%, and hospital services climbed 0.7%. Medical care prices overall rose 0.3%.
Not every category became more expensive. Motor vehicle insurance prices declined 1.7% in May, household furnishings and operations fell 0.6%, and new vehicle prices dropped 0.3%.
The report suggests that while underlying inflation remains relatively stable, energy prices have re-emerged as a significant inflationary force, potentially complicating the Federal Reserve's efforts to bring overall inflation closer to its long-term target.