May in Review
Last month, inflation moved higher, with Consumer Price Index (CPI) inflation rising to 3.8% year over year, up from 3.3% the prior month. The increase was driven primarily by energy prices, particularly gasoline, reflecting ongoing disruptions tied to the Middle East conflict.

Labor market data were broadly stable. The unemployment rate remained unchanged at 4.3%, wage growth increased modestly to 3.6%, while job growth continued to be geographically concentrated in the Southern states, particularly cities in Texas. On an occupational basis, healthcare once again led job gains, especially in home health services, a trend we have consistently highlighted. Business formations increased during the month, with notable strength in e commerce and digital services firms. Manufacturing activity also improved, particularly in semiconductors, IT equipment, and natural gas–related energy infrastructure.