CPI - May 2026
CPI >4% y/y for 1st time since Apr 2023 driven by energy, but core cool w/core goods falling and shelter easing. Real weekly earnings though weakest y/y since Apr 2023.
US CPI (M/M) May: +0.5% (est +0.5%; prev +0.6%)
- CPI (Y/Y): +4.2% (est +4.2%; prev +3.8%)
- Core CPI (M/M): +0.2% (est +0.3%; prev +0.4%)
- Core CPI (Y/Y): +2.9% (est +2.9%; prev +2.8%)
US CPI Supercore (M/M) May: +0.27% (prev +0.454%)
- CPI Supercore (Y/Y): +3.67% (prev +3.379%)
Executive Summary
• US May headline CPI eased to +0.47% from April’s +0.64% (m/m), but the rate from a year earlier (y/y) accelerated to +4.25%, the first 4%-plus reading since April 2023, with energy costs (+3.9%) accounting for over 60% of the monthly increase.
• Outside of energy, the broad picture was softer — grocery prices barely moved, several core goods categories fell, and the April shelter distortion (see April’s post https://neilsethi.substack.com/p/cpi-april-2026) returned to trend.
• Excluding food and energy, core CPI rose just +0.21% m/m vs the +0.3% expected, but core y/y increased to +2.9% (+2.85%), the highest since September 2025.
• Core Goods deflated -0.1%, the first monthly decline in a year, continuing to suggest limited tariff pass-through.
• Core Services, a metric the Fed watches as it contains roughly 60% of CPI, slowed to +0.29% (from +0.50% in April), as shelter normalized to +0.32% (from +0.61%) and transportation services fell -0.6% on a sharp -1.7% drop in motor vehicle insurance (the largest since 2020).
• Supercore (core services ex-housing), a recent focus of FOMC members (perhaps not so much under new Chair Warsh), decelerated to +0.27% from April’s +0.45%, but y/y rose to +3.67% (from +3.38%).
• Inflation outpaced earnings for a third straight month, with real average weekly earnings (i.e., weekly take-home pay minus inflation) falling -0.15% m/m (after -0.19% in April and -0.94% in March) and -0.42% y/y, the biggest drop since April 2023.
