May CPI: Inflation Still Running Hot

By SBE Council at 10 June, 2026, 12:24 pm

by Raymond J. Keating -

Inflation continued to run hot in May, according to the latest Consumer Price Index report from the U.S. Bureau of Labor Statistics.

CPI increased by 0.5 percent in May (on a seasonally adjusted basis). As noted in the following chart from the report, this came after an increase of 0.6 percent in April and 0.9 percent March.

Over the past three months, inflation ran at roughly an 8 percent annualized rate, and at about 5.6 percent over the past six months. That's not just hot, that's red hot.

While some strangely talk about economic and/or employment growth causing inflation, that's always been an absurdity. After all, in the end, inflation is about too much money chasing too few goods. Therefore, more growth, i.e., the production of more products, works against inflation.

In the meantime, our current bout of inflation most clearly rests on two matters (along with a few others in the mix) - increased energy costs related to the Iran war, and unprecedented loose money being run by the Fed for the past 18 years that serves as the ultimate fuel for the inflation fires.

The result? Inflation, of course, diminishes the value of the dollar, which means that consumers get less for a buck, worker pay is diminished, entrepreneurs face increased input costs, and investors, for example, experience reduced real returns.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .