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NewsWPLG Local 10June 25, 2026Miami-Dade

Inflation Hits Three-Year High as Costs for Gas and Tech Rise

A key inflation measure rose to a three-year high in May, driven by increased costs for gasoline and computer components. While the Federal Reserve is holding interest rates steady, some economists now anticipate potential rate hikes to combat persistent price increases.

inflationeconomyFederal Reserveinterest ratesconsumer spendingenergy prices
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Why It Matters

Rising inflation impacts the purchasing power of all U.S. households and influences Federal Reserve decisions on interest rates, which affect the cost of borrowing for mortgages, auto loans, and credit cards.

Key Facts

  • The personal consumption expenditures (PCE) price index rose 4.1% in May compared to the previous year, the highest level since April 2023.
  • Monthly inflation was 0.4% in May, matching the increase seen in April.
  • Core inflation (excluding food and energy) rose 3.4% in May compared to a year earlier.
  • The Federal Reserve has kept interest rates unchanged this year, moving away from previous plans to cut rates.
  • Average nationwide gas prices reached nearly $4.50 per gallon in May before falling to $3.92 as of the report date.
  • Inflation-adjusted consumer spending rose 0.3% from April to May.
  • Inflation-adjusted incomes increased by 0.3% in the same period.
  • The U.S. economy grew at an annual rate of 2.1% in the first quarter of the year.
  • The Federal Reserve maintains a long-term inflation target of 2%.
  • Apple announced price increases for computers and iPads due to rising costs for semiconductors and computer equipment.

Who's Mentioned

organizationApple“Company raising prices due to component costs”organizationCommerce Department“Government agency that released the inflation data”personJoe Biden“Former President”organizationAAA“Source for gasoline price data”organizationFederal Reserve“Central bank responsible for monetary policy”personMark Vitner“Chief economist at Piedmont Crescent Capital”personKevin Warsh“Federal Reserve Chair”personDonald Trump“President of the United States”