Inflation tops 4% for the first time in 3 years on spike in gasoline prices

Inflation reached 4.2% in May 2026, the highest in over three years, driven by soaring gasoline prices linked to the U.S.-Iran war. Energy costs accounted for over 60% of the monthly rise in consumer prices, while wages increased 3.4%, reducing workers' real spending power. Core inflation, excluding food and energy, rose 2.9% annually.