By Alicia Wallace

Inflation, as measured by the Consumer Price Index, is expected to run above 4% for the first time in three years because of the Iran war’s oil price shock.

May’s higher gas prices are expected to have an outsized effect on overall inflation, pushing up costs at a similar pace as that seen in 2021 and 2022, when inflation was headed for a four-decade high of 9.1%.

Economists expect that inflation rose 0.5% in May and 4.2% from a year ago, according to FactSet estimates. That would put the three-month average at just under 0.7%, the fastest since the April to June 2022 period (when it was 0.8%).

That’s an unsettling throwback; however, economists say that this bout of inflation isn’t expected to be as bad as the last one – current projections have CPI topping out in the range of 4.5% to 5% this year.

However, price levels are another matter. The latest inflation shock is adding another layer of fast-rising prices: Common goods and services are significantly more expensive than they were before the pandemic.

Trucks pass shipping containers stacked at the Port of Los Angeles on May 8, 2026. Mario Tama/Getty Images

Affordability pressures are building, and Americans are having a harder time keeping up.

Fast-rising prices are already outstripping Americans’ paychecks, and that gap is widening. If CPI rises 4.2% in May, it will mean that real (inflation-adjusted) wages are declining at an annual rate of 0.8%.

The ripple effects from the war-driven energy price shock could become even more evident in May’s data, although it’s expected to be a slow boil: Categories such as airfares, transportation, food and apparel could see further increases.

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In April, prices of fruits and vegetables, which are often transported by refrigerated diesel trucks, rose by 2.3%, the highest monthly increase for that category since 2010. Tomato prices have risen by more than 15% for two months in a row.

Outside of food and energy, price hikes are expected to be more muted. Economists are expecting that “core” inflation rose by 0.3% in May and that the annual rate ticked up to 2.9% from 2.8% the month before.

This story will be updated when the Bureau of Labor Statistics releases its CPI report for May at 8:30 a.m. ET.

Follow the updated story on CNN BUSINESS