Inflation sped up in May. What's to blame?

June 25, 2026

AI Summary

5 min read

Inflation Accelerated in May. Here’s What’s Driving It.

The Personal Consumption Expenditures price index hit 4.1% in May, faster than April’s reading, and the core rate — which strips out food and energy — is picking up too. Most of the headline jump traces back to energy costs tied to the war in Iran, but with a ceasefire holding and oil prices retreating, economists are focused on the stickier inflation underneath.

Core inflation began accelerating in April of last year, according to Tim Duy, chief U.S. economist at SGH Macro Advisors. The sources are broad: insurance, healthcare services, financial services, food services, and accommodations. Duy notes that tariffs took time to feed through to other costs, but strong demand from a good jobs market late last year also played a role. “Some of our biggest accelerations in inflation started in December, January, and into March,” he said.

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What you'll learn

1 (02:07) **Inflation Sped Up in May** - The Personal Consumption Expenditures price index hit 4.1% in May, up from April, driven largely by energy costs linked to the Iran war.
2 (04:48) **GDP Revised Up, But Consumer Spending Weakened** - First-quarter GDP grew at an annual rate of 2.1%, revised up from 1.6%, but the details show a weaker consumer.
3 (08:03) **Property Tax Cuts Strain Public Services** - At least 18 states are considering cutting or eliminating property taxes, and Wyoming's experience shows the painful trade-offs.
4 (12:30) **The Rancher's Perspective on Inflation** - Nathan Bradford, a cattle rancher in Oklahoma, explains how inflation and high interest rates are squeezing producers.
5 (16:19) **Market Close and Stock Movers** - The Dow rose 71 points, the NASDAQ fell 118, and the S&P 500 was flat. Darden Restaurants and Intuit (TurboTax) fell, while H&R Block rose slightly.
6 (19:25) **Great Lakes Shipping: A Vital, Perilous Industry** - As the shipping season begins, communities on the Great Lakes hold a "Blessing of the Fleet" for the safety of the crews who move critical cargo.
7 (23:20) **"Solo Maxing" and the Decline of Dating Apps** - A new trend sees Gen Z and millennials embracing being single, partly due to the high cost of dating.

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Show Notes

Inflation was up 4.1% in May, according to the BEA’s personal consumption expenditures index. We know hot energy prices, resulting from the war in Iran, were part of that spike. But cut out energy and food, and inflation still hit a three-year high, at 3.4%. So what else is driving the increase? Also in this episode: Q1 GDP is revised up, Wyoming navigates the consequences of property tax cuts, and Great Lakes cargo ships make up a vital branch of U.S. supply chains.

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