Energy prices drive inflation rate to 3-year high of 4.2%, core inflation steady at 2.9%

The Consumer Price Index hit 4.2 percent in May, the highest annualized inflation rate in three years. The record high comes amid spiked energy prices driven by the conflict in Iran, which also impacts many other facets of the economy. However, core inflation, which excludes food and energy and is the preferred method to measure inflation, was at 2.9 percent and is in line with economic forecasts.

The index for energy in particular impacted the price increases seen across the economy. According to a press release from the Bureau of Labor Statistics, "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."

From April to May, the inflation rate rose 0.5 percent. Energy alone from April to May rose by 3.9 percent. The increase in prices of energy across the board has skyrocketed due to the conflict with Iran and the closing of the Strait of Hormuz, a key waterway for commercial shipping of crude oil out of the Middle East.

When Trump was asked about the inflation taking place, he said that the price increases were something that would subside after the conflict with Iran is over. “The numbers were great. You know what I really love? I love the inflation. You know why? Because as soon as this war is over—do you know we've been taking out millions of barrels of oil? Nobody knows it."

Trump then said the US has been transporting oil out of Iran in secret, and that oil prices will be coming way down, as well as inflation.

"When the war is over, it’s coming down, it’s going to come down like a rock," he added