Inflation moved up in May as Trump's tariffs threatened to filter into consumer prices, CPI report shows. Gasoline prices declined for fourth month

The Consumer Price Index rose 2.4 percent in May, from a year earlier, a reading that reflects only the initial impact of President Trump’s tariffs.

Meaningfully larger increases are likely in coming months” to inflation as tariffs take hold, said the top U.S. economist at the nation’s largest bank.

Expected price hikes from a wave of US tariffs on global trade have yet to meaningfully show up in government inflation data, but economists warn that increases may be close.

More than half of Americans (56 percent) say they believe that the U.S. economy is headed in the wrong direction, according to Bankrate’s new Consumer Sentiment Survey. That’s virtually unchanged from a similar Bankrate poll published before the November 2024 presidential elections, when 55 percent felt the economy was on the wrong track.

Inflation rose less than expected in May, a month when the effects of higher tariffs were starting to become more widespread.

Inflation dodged the tariff bullet again. The May Consumer Price Index rose +0.1% M/, less than the +0.2% consensus and the 0.2% increase in April.

Annual inflation rose to a 2.4 percent pace in May, suggesting President Donald Trump’s tariffs have yet to drive up the cost of everyday products.