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

Marketplace All-in-One

Marketplace

News, Business

4.5 • 1.4K Ratings

🗓️ 25 June 2026

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

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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Transcript

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0:00.0	There's a lot going on right now. Mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air.
0:11.2	I'm Brooke Gladstone, host of WNYC's On the Media. Want to understand the reasons and the meanings of the narratives that led us here and maybe how to head them off at the
0:22.4	past? That's on the media's specialty. Take a listen wherever you get your podcasts.
0:31.2	We'll do an update on where this economy stands. We'll do taxes too. Sorry about that. And we'll spend some time alone. From American
0:41.7	Public Media, this is Marketplace. In Los Angeles, I'm Kai Riznell. It is Thursday. Today, this one is the 25th of June. Good as it always is to have you along, everybody.
1:03.0	This is a day of data in this economy of ours, data about prices and data about growth.
1:10.5	4.1% is the headline price level data point,
1:14.0	as you have likely already heard today, the Personal Consumption Expenditures Price Index for May,
1:19.4	and that 4.1% is faster than April inflation, as you do not need me to tell you, most of it,
1:25.6	thanks to energy and the president's war in Iran.
1:28.0	So with energy on its way back down now on the theory that the ceasefire is going to hold,
1:33.3	we are going to do what the Federal Reserve likes to do, spend some time on all the other
1:37.1	inflation happening in this economy, the core rate, as it's called.
1:41.5	As Marketplace's Justin Ho reports, that's picking up too.
1:45.6	The rise in core inflation really started in April of last year when the president announced
1:50.1	his import taxes. Those tariffs did push additional price pressures in the economy,
1:55.4	particularly for the price of goods. Tim Dewey is chief U.S. economist at SGH macro advisors.
2:02.6	He says later last year,
2:08.0	core inflation started to hit services, too. So that could be anything from, you know, insurance or health care services, financial services, food services, accommodations.
2:14.6	Dewey says the delay could be because tariffs took a little time to impact other costs,
2:19.2	but it could also be because demand was strong, thanks to a good jobs market.
2:22.9	The labor market did seem to turn stronger at the end of last year.
	...

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