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Why Is US Inflation Expected To Rise Above 4% Again

Economists surveyed by FactSet expect the Consumer Price Index to rise 0.5% in May and 4.2% from a year earlier.

,   and  TIPP Staff
2 min read
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US inflation is expected to exceed 4% for the first time in three years, driven largely by higher energy costs linked to the ongoing conflict involving Iran, according to a CNN report citing economist forecasts.

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Economists surveyed by FactSet expect the Consumer Price Index to rise 0.5% in May and 4.2% from a year earlier. The report said surging gasoline prices are once again becoming a major contributor to inflation, echoing the price pressures seen during the 2021-2022 inflation spike.

The latest increase is expected to intensify affordability concerns for American households. According to the report, wage growth is failing to keep pace with inflation, resulting in a decline in real earnings. If annual inflation reaches 4.2%, inflation-adjusted wages would fall by roughly 0.8%.

Higher fuel costs are also pushing up transportation expenses, airfares and food prices. The report noted that fruit and vegetable prices have risen sharply, while tomato prices have recorded double-digit increases for two consecutive months.

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Economists expect core inflation, which excludes food and energy, to remain more moderate, with annual core inflation projected at 2.9% in May.

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