Inflation in the United States saw a slight increase in May 2025, with an annual rise of 2.4%, according to data released by the Bureau of Labor Statistics (BLS) this Friday. The monthly increment was 0.1%, largely driven by rising costs in housing and food, despite President Donald Trump's efforts to dismiss these figures.
The report indicates that the housing index, which climbed by 0.3% in May, was the biggest contributor to the monthly increase, remaining a key structural element of inflationary pressure. Annually, housing costs have risen 3.9%, marking the lowest rate since 2021.
Similarly, the food index recorded a 0.3% monthly increase, with prices rising for both at-home and dining-out food expenses. Notable price hikes were seen in cereals and bakery products (+1.1%) and fruits and vegetables (+0.3%), while egg prices dropped by 2.7% in May. However, eggs still show a 41.5% inflation rate over the past year.
Conversely, the energy index fell by 1.0%, thanks to a 2.6% decrease in gasoline prices. There were also declines in the costs of new vehicles (-0.3%), used cars (-0.5%), and clothing (-0.4%), which helped to soften the overall price increase.
The core index, which excludes food and energy, saw a modest increase of 0.1% in May, following a 0.2% rise in April. Over the past 12 months, this measure has advanced by 2.8%, slightly below the 2.9% anticipated by analysts. Moderate increases were noted in medical services (+0.3%), vehicle insurance (+0.7%), and education (+0.3%).
Despite the current data suggesting contained inflation, experts caution that the effects of new trade tariffs have yet to be fully reflected in prices. "The lower-than-expected inflation figure is somewhat reassuring, but only to a certain extent," remarked Seema Shah, a strategist at Principal Asset Management. "Price increases driven by tariffs could emerge in the coming months," she emphasized.
The White House remains engaged in crucial trade negotiations with China and other countries impacted by the new tariffs imposed by the Trump administration. Some agreements might be reached before July, potentially marking a turning point in price trends.
The Federal Reserve continues to monitor the core index closely as an indicator of sustained inflationary pressures.
Understanding Inflation Trends in the U.S.
What factors contributed to the recent rise in U.S. inflation?
The recent rise in U.S. inflation was primarily driven by increased housing and food costs. The housing index saw a notable increase, contributing significantly to the overall inflation rate.
How did energy prices affect inflation in May 2025?
In May 2025, energy prices, particularly gasoline, decreased, which helped moderate the overall inflation rate despite rising costs in other sectors.
Why are experts concerned about future inflation despite current data?
Experts are concerned that the effects of new trade tariffs have not yet been fully realized in the current inflation data, suggesting potential for future price increases.