A man shops for groceries at a store in Arlington, Virginia, the United States, on June 10, 2026. The U.S. consumer price index (CPI) rose 4.2 percent year on year in May, marking its highest level since May 2023, as energy prices remained high, according to data released by the U.S. Bureau of Labor Statistics on Wednesday. (Photo: Xinhua/Li Rui)

NEW YORK, June 10 (Xinhua) -- The U.S. consumer price index (CPI) rose 4.2 percent year on year in May, marking its highest level since May 2023, as energy prices remained high, according to data released by the U.S. Bureau of Labor Statistics on Wednesday.

Notably, the energy index for May increased 3.9 percent month on month, accounting for over 60 percent of headline inflation.

Gasoline and fuel oil prices increased 40.5 percent and 58.9 percent year on year, respectively, in May.

The national average price of gasoline reached 4.555 U.S. dollars per gallon on May 20, a 50 percent rise since the Iran conflict started in February, according to data released by the American Automobile Association. The price later eased to 4.151 dollars per gallon on Wednesday.

The core CPI, which excludes volatile food and energy prices, increased 2.9 percent year on year in May.

Statistics show that U.S. headline CPI for May rose 0.5 percent month on month, down from 0.6 percent in April, while core CPI increased 0.2 percent, compared with a 0.4 percent gain in April and below the market consensus forecast of 0.3 percent.

The report arrives at a critical juncture for markets and Federal Reserve policymakers. While the rate-setting Federal Open Market Committee is widely expected to hold interest rates steady at its June 17 meeting, policymakers acknowledged that the inflation surge caused by the Iran conflict will likely delay any rate reduction. The data are likely to reinforce this stance.

"The data were largely in line with consensus and core inflation came in a tick below expectations on a month-on-month basis at 0.2 percent," said Shawn Snyder, economic strategist at Potomac Fund Management. "That said, inflation has been above the Fed's target for over five years now and is trending in the wrong direction. It is hard to envision the president's desired rate cuts against this backdrop."

"Despite inflation moving down in May, this report is likely to leave the Fed on hold in the near term as inflation remains elevated," said Frank Nickel, Proprietary Strategies at Orion AAC.

Oil prices rose while U.S. stocks traded lower in the morning session on Wednesday after U.S. President Donald Trump posted on Truth Social that Iran has "taken too long to negotiate a deal" and will "have to pay the price."