The U.S. Bureau of Labor Statistics released its inflation report
for May on June 10^th.

May Inflation Summary:

The BLS reported Annual Inflation was up a “seasonally-adjusted” 0.5% from April’s 3.8% to May’s 4.2%. That was on top of the 0.5% “seasonally-adjusted” increase from 3.3% in March to 3.8% in April. When we look at the 2-decimal-place non-adjusted numbers, we see it rose even more in April, i.e., from March’s 3.26% to 3.81% (or 0.55%), and less in May (0.44%) to 4.25%.

• The CPI Index rose from 333.020 in April to 335.123 in May
• Monthly Inflation for May 2026 was 0.63%, up from 0.21% in May 2025. 
• Monthly Inflation for April 2026 was 0.85%, up from 0.31% in April 2025. 
• Next release: July 14^th, 2026

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.2 percent before seasonal adjustment. The index for energy rose 3.9 percent in May, after rising 3.8 percent in April and 10.9 percent in March. The energy index accounted for over sixty percent of the monthly all items increase. The index for shelter also increased in May, rising 0.3 percent. The food index increased 0.2 percent over the month as the food at home index rose 0.1 percent and the food away from home index increased 0.3 percent.”

The War in the Middle East closed the Straits of Hormuz, disrupting Oil flows. However, oil prices seem to be moderating as some oil is starting to get through. This is a totally different type of inflation than one induced by FED money printing.

The closure of the Strait of Hormuz represents a supply-side shock, fundamentally different in nature from demand-side monetary inflation. When the Fed expands the money supply, inflation is driven by too many dollars chasing the same goods; it’s a broad, diffuse phenomenon that erodes purchasing power across the economy and is more systemic. The Hormuz closure, by contrast, physically removes a critical input from the global economy, spiking energy costs that cascade through the economy but can be short-lived if the supply is restored quickly. Raising interest rates in response to this kind of inflation is counterproductive, since it strangles the demand side of an economy already being strangled on the supply side. This risks creating stagflation, i.e., the toxic combination of rising prices and a stagnant economy.

Looking at “Table A” below, we can see that energy commodities like gasoline are up a crazy amount annually. But surprisingly, there are two categories that are actually down (green boxes) on an annual basis and 5 that are down on a monthly basis.

As you can see from our MIP projection from last month, May inflation was very slightly above our “Extreme Low” so, it could have been worse.

Go here to view our current MIP projection.

The monthly inflation rate for May 2026 was 0.63% compared to 0.85% in April 2026 and 0.21 a year ago.

See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.

This month, inflation is up sharply again, and unemployment is unchanged, so the misery index rose from 8.11% to 8.55%. It is still considerably below June 2022, when the index was at 12.66%.

Read More on the Misery Index…