The 5-Stat

Five Numbers from CPI Day — May 12, 2026

Tuesday, May 12, 2026

Get it in your inbox

"Inflation is the one form of taxation that can be imposed without legislation." — Milton Friedman

May 12, 2026

3.8%

April Headline CPI Came In at 3.8% — the Highest Reading Since May 2023 and a Full Half-Point Acceleration From March in a Single Month

The Bureau of Labor Statistics reported this morning that consumer prices rose 0.6% in April and 3.8% over the past 12 months, slightly above the 3.7% economists expected and more than a full percentage point higher than the 2.4% rate the country was running before the Iran war began in late February. Energy alone accounted for over 40% of the monthly all-items increase. Core CPI — which strips out food and energy — accelerated to 2.8%, its hottest annual reading in seven months. The Fed's 2% target hasn't looked this far away since 2023.

Source: U.S. Bureau of Labor Statistics — Consumer Price Index, April 2026

−0.3%

Real Hourly Wages Went Negative Year-Over-Year for the First Time Since April 2023 — Ending a Three-Year Stretch in Which American Workers Were Finally Beating Inflation

Nominal wages grew at a respectable 3.6% annual pace in April, but with CPI accelerating to 3.8%, the math finally turned: inflation-adjusted hourly earnings dropped 0.5% on the month and 0.3% from a year ago, the first negative annual reading in three years. The crossover ends the quietly hopeful post-2023 story that workers had begun outrunning prices. "For the first time in three years, inflation is eating up all wage gains," Navy Federal's chief economist Heather Long said Tuesday morning. "This is a setback for middle-class and lower-income households, and they know it."

Source: U.S. Bureau of Labor Statistics — Real Earnings Summary / CNBC

+0.7%

Grocery Prices Jumped 0.7% in a Single Month — the Biggest One-Month Increase in Food-at-Home Costs Since August 2022

Energy got the headline, but food at home rose 0.7% month-over-month — its sharpest jump since the post-pandemic peak in August 2022 — and that's the line item people see most often. Fruit and vegetable prices climbed 1.8% in the month and beef prices ticked up 2.7%, putting fresh pressure on the executive order Trump has reportedly been weighing to remove tariffs on beef imports. Diesel ripples through trucking and trucking ripples through every aisle of the grocery store; the energy shock is finally showing up in the cart.

Source: U.S. Bureau of Labor Statistics / Capital Economics commentary

3 Days

Jerome Powell Has Three Days Left as Fed Chair — and This Morning's Inflation Report Was the Last Major Data Release of His Eight-Year Tenure

Powell's term as chair ends Friday, May 15, and Kevin Warsh — who has pledged faster rate cuts and a "regime change" at the Fed — takes over for the June FOMC meeting. The April CPI is the final macro print Powell will see from the chair's seat, and it dropped any remaining odds of a near-term cut to roughly zero. Futures markets have actually nudged the probability of a 2026 rate hike up to about 30% — an outcome that was a flat 0% three months ago, and one Warsh would inherit on his first week.

Source: Federal Reserve / CME Group FedWatch / CNN Business

3.6%

Consumers Now Expect 3.6% Inflation Over the Next Year — the Highest Short-Term Reading in Over a Year — But Five-Year Expectations Remain Anchored at 3.0%

The New York Fed's April Survey of Consumer Expectations, released last week, showed one-year inflation expectations climbing for the second consecutive month to 3.6%, while the five-year horizon held flat at 3.0% for the fourth month running. Long-run expectations staying put is the entire ballgame for the Fed: it means the public still believes the inflation overshoot is temporary, even with gasoline up 28.4% year-over-year and food rising at its fastest monthly pace in nearly four years. Lose that anchor and this morning's 2.8% core CPI becomes a very different problem.

Source: Federal Reserve Bank of New York — Survey of Consumer Expectations, April 2026