The rate of inflation has surpassed wage growth, which was tracking at 3.4% in the most recent jobs report.

Inflation surged in May to the highest level since early 2023, as Iran war-related fuel costs worked their way through the broader economy.

Overall, the yearly inflation rate rose to 4.2% in May from a year ago, up 0.5% from April.

Energy prices – a broad index that includes gasoline – soared 23% in May compared to a year earlier, U.S. Bureau of Labor Statistics data showed.