U.S. consumer prices rose 4.2% in May

U.S. consumer prices increased 4.2% in May from a year earlier, according to the Bureau of Labor Statistics, marking the highest annual inflation rate in three years. The monthly consumer price index rose 0.5%, both readings matching economists’ expectations. Core CPI, which excludes food and energy, rose 0.2% on the month and 2.9% over the past year. The annual core measure was in line with forecasts, while the monthly increase came in slightly below expectations. Much of the monthly rise came from energy prices, which jumped 3.9% and were up 23.5% from a year earlier. Food prices rose modestly, shelter costs increased more slowly than in April, and some other categories, including transportation services and new vehicles, were weak. The report arrives as investors watch the Federal Reserve’s next interestrate decision and weigh how higher energy costs could affect the broader economy.