By Emma Ockerman

Just how much did consumer prices increase in May?

Market watchers will soon find out via key inflation data scheduled for release at 8:30 a.m. ET on Wednesday. The data arrives more than three months into a war with Iran that has pressured prices around the world and dampened consumer sentiment in the US.

Economists surveyed by Bloomberg expect the Labor Department to report that consumer prices rose 0.5% from April and 4.2% from last May. Those rates would represent the hottest annual reading since April 2023 and an acceleration from last month's 3.8% inflation rate.

On a "core" basis, which strips out volatile energy and food costs, economists expect a more modest bump of 0.3% from April and 2.9% from a year ago.

Read more: What is inflation, and how does it affect you?

Fuel prices are displayed at a gas station in Brooklyn on June 1, 2026, in New York City. (Spencer Platt/Getty Images). Spencer Platt via Getty Images

Energy will likely once again power the month's sharp consumer price gains, though food prices are also rising. As of Tuesday, gas prices were averaging $4.16 a gallon nationally, according to AAA, about $1 more than a year ago.

"Higher energy prices continue to push headline inflation up," Royal Bank of Canada economists wrote in a note last week. "And we do not expect to see a meaningful reprieve in the food space either, especially following recent headlines about beef prices."

The consumer price data and wholesale inflation data out on Thursday will be important for Federal Reserve policymakers ahead of their June meeting. Last week's jobs data showed the labor market remains broadly in balance, making inflation the larger concern as it remains well above the Federal Reserve's 2% long-term target.

A hot print could strengthen the case for interest rate hikes this year, particularly if inflation becomes more broad-based.

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