Rising Inflation in May: A Domestic Issue
In May, inflation reached levels not observed in three years due to increasing energy costs linked to the ongoing conflict in Iran. As per the Bureau of Labor Statistics’ recent report, consumer costs rose by 4.2% compared to last year, marking the largest 12-month surge since April 2023. However, inflation showed a slight month-over-month decline, with a rise of 0.5% in May, down from April’s 0.6%.
Increasing oil and gas prices fueled these inflationary pressures, contributing over 60% to the monthly increase in all categories. The war with Iran has led to persistently high energy prices. The closure of the Strait of Hormuz by Iran has disrupted the transport of a significant portion of the world’s oil and gas.
War Impacts Energy and Fuel Supply
The United States has responded by blockading Iranian ports and targeting tankers trying to navigate the strait, effectively halting the flow of fuel. This disruption has led to reduced oil, diesel, and gas supplies domestically, causing prices to increase. Gasoline prices have surpassed $4.50 per gallon nationwide, with electricity costs also hitting record highs.
Examining Consumer Goods and Inflation
A slight rise in food and shelter costs further aggravated inflation last month. An ongoing tracker monitors everyday costs for items like eggs, milk, bread, and gasoline. The report draws data from the U.S. Bureau of Labor Statistics and is updated monthly.
Eggs
Egg prices have decreased every month since March 2025, following a bird flu outbreak that previously pushed costs up. Currently, a dozen large Grade A eggs costs $2.19, a drop of more than 50% annually.
Milk
Conversely, milk prices have been on the rise, reaching $4.22 per gallon after an 8-cent increase in May. This is a 5% increase over the previous year.
Bread
Bread costs fell by 4 cents from April, averaging $1.83 per pound. This represents a 5% decrease since the beginning of the Trump administration’s second term.
Bananas
The price of bananas remained steady at $0.65 per pound, staying within the 65 to 67 cents range for the past year.
Oranges
Orange prices rose by 2.5% month-over-month, reflecting seasonal trends. Prices typically increase in the coming months and peak by early fall, currently priced at $1.54 per pound.
Tomatoes
Tomato prices dropped by 20 cents from April, settling at $2.49 per pound. This change is consistent with seasonal patterns. However, tariffs have substantially increased prices since a duty on Mexican-grown tomatoes was introduced, causing a near 40% rise.
Chicken
Chicken remained relatively stable in May, costing $2.04 per pound, with little fluctuation in recent months.
Ground Beef
Ground beef prices fell by 20 cents in May to $6.72 per pound. Despite this, prices remain historically high due to a decline in U.S. beef production. The national cattle inventory is at a 75-year low, affected by environmental issues such as drought and fires.
Electricity
Electric costs increased, reaching 20 cents per kilowatt-hour, leading to an average monthly bill of approximately $176. This marks a 9.5% rise since January 2025.
Gasoline
The nationwide average for gasoline climbed by 40 cents to $4.65 per gallon of regular unleaded in May. In Chicago, prices, soared by 60 cents to $5.06 per gallon due to disruptions from the Middle East conflict.
Natural Gas Remains Stable
Despite rising oil costs, natural gas prices in the U.S. have remained relatively steadfast. For example, prices increased by less than a cent in May. High domestic production and low demand have shielded U.S. consumers from the spikes seen in Europe. Americans pay slightly more for natural gas than at the beginning of the current administration.