Marketplace - Inflation sped up in May. What's to blame?

Episode Date: June 25, 2026

Inflation was up 4.1% in May, according to the BEA’s personal consumption expenditures index. We know hot energy prices, resulting from the war in Iran, were part of that spike. But cut out energy and food, and inflation still hit a three-year high, at 3.4%. So what else is driving the increase? Also in this episode: Q1 GDP is revised up, Wyoming navigates the consequences of property tax cuts, and Great Lakes cargo ships make up a vital branch of U.S. supply chains.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories from today’s episode:It's not just food and energy — "core" inflation is up as wellGDP grew 2.1% in the first quarter of 2026. What does that tell us?What do we need property taxes for? Wyoming is finding outNeed a burger? A car? Winter road salt? Thank cargo ships on the Great LakesGen Z trades in date-flation for "solo-maxxing"

For decades, companies built their procurement and supply chains around cost and efficiency. Today, that's no longer enough. Wars, trade conflicts, and the regionalization of trade have changed the rules. Companies still need to control costs, but they also need to reduce risk and respond faster to disruptions and shocks. GEP helps the world's leading enterprises do exactly that. Through its AI-native quantum intelligence platform and services, GEP helps companies companies gain visibility, predict and manage risk, and make smarter capital investments across their global value chain. More than 7,000 employees across 30 offices support over 1,000 organizations worldwide.

GEP combines agentic AI with three decades of procurement and supply chain data and expertise. Learn more at gEP.com. On all of it with me, Allison Stewart will talk about art, music, theater, literature, History, food. Well, all of it. Hear in-depth, insightful interviews with authors like Zadie Smith, musicians like Steve Earle, actors like Kate Winslet and beyond. You never know who you'll hear next on all of it. But it's always worth listening. That's all of it. Available wherever you get your podcasts. We'll do an update on where this economy stands. We'll do taxes too. Sorry about that. And we'll spend some time alone. From American public media, this is Marketplace. In Los Angeles, I'm Kai Rizzdahl. It is Thursday. Today, this one is the 25th of June. Good, as it always is, to have you along, everybody. This is a day of data in this economy of ours, data about prices and data about growth.

4.1% is the headline price level data point, as you have likely already heard today. the Personal Consumption Expenditures Price Index for May, and that 4.1% is faster than April inflation, as you do not need me to tell you, most of it, thanks to energy and the President's War in Iran. So with energy on its way back down now on the theory that the ceasefire is going to hold, we are going to do what the Federal Reserve likes to do, spend some time on all the other inflation happening in this economy, the core rate, as it's called. As Marketplace's Justin Ho reports, that's picking up too. The rise in core inflation really started in April of last year when the president announced his import taxes. Those tariffs did push additional price pressures in the economy, particularly for the price of goods. Tim Dewey is chief U.S. economist at SGH macro advisors. He says later last year, core inflation started to hit services too. So that could be anything from insurance or health care services, financial services, food services, accommodations.

Dewey says the delay could be because tariffs took a little time to impact other costs, but it could also be because demand was strong, thanks to a good jobs market. The labor market did seem to turn stronger at the end of last year. And I would note that really some of our biggest accelerations in the inflation started in December, January, and into March. The war in the Middle East is boosting core inflation too. Jeffrey Roach as chief economist at LPL Financial. Think of logistics costs. of transportation costs. Roach says that's increased the price of goods, and that, in turn, is boosting

the cost of services, including health care. When you think about the impact on the costs of the materials those professionals use, it starts to make sense, understanding why, for example, dental services is up over 8% from a year ago. It'll take some time for the war's knock-on effects on prices to subside. Michael Pierce, his chief U.S. economist at Oxford Economics. If we look at gasoline prices, they've fallen back, but they're still about a dollar above where they were before the war. And it's going to take time for that to normalize. Meanwhile, Pierre says there's still plenty of demand keeping prices high. And overall, the labor market is still in good shape.

Our expectation is that the labor market will be broadly stable this year that will see the unemployment rate remain pretty close to where it is. And that could keep pressure on prices to keep heading upward throughout the year. I'm Justin Ho for Marketplace. The growth data point du jour is the third and final look at gross domestic product for the first quarter of the year. It came to us, courtesy of the Bureau of Economic Analysis, which told us this morning, the economy grew at an annualized rate of 2.1% January through March. That is a revision up from the last guess, which was 1.6%, which is nice, but it's not the whole story. Consumer spending was revised down, and the overall GDP number was boosted in part, because we imported less stuff than people had originally thought.

Now, what might that mean for the economy yet to come? Here's Marketplace's Henry App. These GDP numbers measure where the economy was several months ago, but they can give us something of a baseline for the rest of the year. The new data released today actually make that baseline look a bit lower than expected, says Twan Wen, an economist at RSM. You put softer spending growth and lower imports together. You get a much weaker problem.

picture of the American consumer in the first quarter. Not great, given that consumer spending makes up close to 70% of GDP, but there are different ways you can look at where economic growth might go from here. The glass have full view, the worst of the oil price spike, which was a drag on consumer spending and aid into corporate profits, might be behind us. Most of the impact of the Iran war was actually felt in the first quarter. And if oil keeps falling, consumers might have a bit more spending power, says Eugenio Alamann, chief economist at Raymond James, which is a marketplace underwriter. I think that things are going to improve for the American consumer.

And as long as the job market remains strong, I think that the economy is in a good path. The glass half-empty view, yeah, the job market is pretty good, but wages are not keeping up with high inflation. Sarah House is a senior economist at Wells Fargo. Those paychecks still aren't rising very quickly. And with that inflation backdrop, it's hard for consumers to really ramp up their spending right now. Plus, in the first quarter, consumers were getting a boost from higher than usual tax refunds. As we get into the second half, a lot of that money's already been spent.

Still, there's a lot of corporate investment going on right now. So House thinks economic growth might plot along the rest of the year. Ethan Struby, an assistant professor of economics at St. Olive College, has a similar view. Without like big changes to population growth, big changes to, you know, productivity, that kind of thing, then we're just not going to see much faster than 2% growth very often. So in that sense, first quarter GDP might be a sign of things to come. I'm Henry App for Marketplace. Wall Street as the week winds down, the chipmaker micron technologies blew the doors off its earnings forecast yesterday. But that was small solace to traders who've gotten the AI jitters.

We will have the details when we do the night. All kinds of different taxes in this country. Income taxes, sales taxes, Social Security taxes, and property taxes. Those property taxes typically go to towns and counties for public services, think fire departments, libraries, ambulances, and roads. They're just one of the things you've got to pay until you don't. At least 18 states are looking at cutting or even eliminating their property taxes. So marketplace is Caitlin Tan is going to take us to a state where that has already happened to see how it's working out. Like many places during COVID, home values skyrocketed in Wyoming's Little Mountain towns.

People were coming in from out of state. They were paying cash offers. They were paying over-asking price. And so that just made the market go up. Hank Hover's Lund with the Wyoming Taxpayers Association says property taxes followed, meaning long-time Wyomingites were suddenly paying a lot more. And that led state lawmakers to lower them last year by 25 percent, saving our state. a homeowner a few hundred bucks, but costing towns and counties tens of millions in revenue. There really isn't a plan to make up these revenues. And so it's going to come on the backs of spending cuts. Like the library in the small town of Lander, Wyoming, where I meet director Anita Marple.

She's wearing a Dr. Seuss T-shirt that says, oh, the places you'll go when you read. Sometimes I just wear this shirt to remind me of, okay, here's our mission. So come on in. Okay, awesome. How was your weekend? Marple actually spent the weekend going over a difficult budget. These days, the library's doors are locked and the lights are out more often. You're here on a Monday morning, and we're closed until 1 p.m.

They used to open at 10 on Mondays. They've trimmed hours on other days, too, and they got rid of three part-time positions. It's all about staffing and having the ability to have people here to serve the public. The library lost about $300,000 in local residential property tax revenue last year. Similar cuts were seen all across the state. Jeremiah Reeman with the Wyoming County Commissioners Association says one rural county cut its emergency management budget in half. Then we saw wildfires in their community, which an unfortunate element of all of this. Another fire district cut over time and briefly shut down a fire station.

Another county is looking to their roads to save money. In other words, just shutting those roads down or maybe paved roads are going to go back to gravel, simply because they don't have the resources to care for those. And more cuts could be coming. This fall, Wyoming voters will get a say if they want an even bigger break on residential property taxes through a ballot initiative. And lawmakers are discussing eliminating property taxes altogether. I also think one of the things that we're not seeing, come up in the conversation is, if not property tax, then what? What is it that you propose

that we use to fund these services? It won't be income tax. Wyoming doesn't have it. Some say raising sales tax is the answer. It currently averages about five and a half percent. But for now, public services will have to make do with less, something Hank Hoversland with the Wyoming State Taxpayers Association doesn't advise. I think other places are looking to Wyoming and saying, can they do it? We have proven that we can't do it. At least not without pain. At the Lander Library, Anina Marple finishes our tour when she spots a couple of people

giving the locked library doors a tug. And we're closed, and it breaks my heart when I feel like we ought to be open and we can't be. It'll still be a few more hours before the library will talk. turn on the lights, unlock the doors, and people can check out books, use the Wi-Fi, and hang out. In Lander, Wyoming, I'm Caitlin Tan for Marketplace. Justin was telling us earlier about core inflation, that is price levels, less food and energy, which always seems odd because we all need energy and food, too. And those prices, as you know, have been going up.

The national average for a pound of chuck is $6.70, almost a buck, up from the same time a year ago. But the price of beef at your local grocery store doesn't tell the whole story for American ranchers. So we've called Nathan Bradford. He's the owner and operator of G-Line Ranch. He's in Bowley, Oklahoma. You know, here at the ranch, with the inflation, the cattle market is good. It's been on an increase. At least once a month, I'm hearing some record prices.

But the problem is the banking system is not keeping up. I feel like that the cattle number is probably going to end up being smaller. The amount of producers are going to keep declining just because we don't get the financing. Once you used to borrow $100,000 now, it's like $30,000 just to do the same kind of work. It's going to be really hard and challenging for America to see B prices to come down. Just because the simple fact is, there is no resources that's helping out, you know, the main street out here like they're doing out here on Wall Street. If the screw worm hits the heart of Oklahoma, it's going to be a pretty devastating deal. So what we're trying to do is apply fly replant onto our cattle, spray them as often as we can.

And then we're looking at buying some mineral supplements that has repelling in it as well that would stop the reproduction of the fly. But there's not much we can do. It's just the simple fact that we already have a shortage of veterinarian. in the United States, especially large animal vets. I don't think that the veterinarians that in the state of Oklahoma can handle the amount of workload

that's going to be generated. This crewworm deal, you have to get those wounds healed up, and that means you've got to have a proper and right facility to catch those animals. Everybody doesn't have that. I'm scattered out in two different counties, and I can't do it at the end of the day. The way I feel today is really kind of sounding and heartbroken because what we thought that once was is no longer ready.

It's what it seems like. I've seen several farmers go out of business. So you think about the experience. I look at my neighbors, the experience that these farmers and ranchers have that they're taking it to the grave with them. And there's nobody to replace them. But, you know, in this ranch in the world, in this rodeo world, sometimes you have a tie off your rope to your saddle horn. And when you hook up, whatever happens, happens, you know what I mean?

But we're going to be in a world of trouble if something doesn't change. Nathan Bradford tied his rope to the saddle horn, G-line Ranch, Bowley, Oklahoma. Coming up. Younger generations, just embracing being single. Solo maxing is the word you are looking for. For first, though, let's do the numbers. Dow Industrial's up 71 points today, a 10th percent, 51,920. The NASDAQ down 118 points, about a half percent, 25,000, 358, S&P 500, basically flat 73-557.

Darden restaurants reported earnings today that beat estimates. Consumers were resilient, the CEO said, but cautious with an increase in visits from all income groups, including those at the bottom. Darden, which owns Olive Garden and Longhorn Steakhouse, down three-tenths of one percent on the day. Caitlin Tan was talking about eliminating or reducing property taxes. Inuit, home to the Turbo Tax Family of Tax Software, contracted 2 and 7 tenths percent. H&R Block put back 1.5 percent on the day. Bond prices down the yield on the tenure.

T-note rose 4.39er percent. You are listening to Marketplace. This Marketplace podcast is supported by Inuit QuickBooks. If you're trying to grow your business, Intuit QuickBooks Workforce can help you lead your business with confidence, clarity, and in a way that makes sense for you. As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or business's finances are the same. As your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities businesses expect with the flexibility to adapt to your specific needs. QuickBooks Workforce combines human intelligence and AI-powered tools so you get smart automation. without ever losing control.

Spend less time reconciling and more time deciding what to do next. Your processes get streamlined and you get precious time and energy back to move forward proactively. Move from reactive to proactive with brand new tools by making the switch to QuickBooks Workforce today. Here Marketplace is My Economy at Marketplace.org slash my economy and learn more about how QuickBooks can help your business grow at quickbooks.com slash workforce. That's quickbooks.com slash workforce. We're approaching the end of our budget year here at Marketplace. and your support is crucial to powering economic reporting that puts you first.

And if we hear from 500 listeners before June 30th, you'll help unlock $50,000 from the Marketplace Investors Challenge Fund. So don't wait, give now, and support this nonprofit public media service. Marketplace is here for everyone, and it's powered by you. So please donate at Marketplace.org, and thanks. This Marketplace podcast is presented by Tomorrow's Cure. If our health care coverage leaves you wanting to learn more about the innovations shaping medicine, tomorrow's cure is for you. It's the chart-topping 2025 Amby Award finalist podcast from Mayo Clinic. Back for a brand new season with new host award-winning journalist Lindsay Sievert,

tomorrow's cure explores the innovations changing the health care landscape. Featuring conversations with leading physicians, researchers, and medical experts, the new season examines everything from AI-powered diagnostics and cutting-edge cancer therapies to surgical technologies improving patient care today. Not sure where to start? Listen to the season premiere featuring MD Anderson Radiation Physicist Dr. Page Taylor and Mayo Clinic Radiation Oncologist Dr. Adam Holtzman. They discuss why carbon ion therapy is generating excitement in the medical community and what

it could mean for the future of precision cancer treatment. So go ahead. Follow tomorrow's cure on Apple Podcasts, Spotify, or wherever you get your podcasts. This is Marketplace. I'm Kai Risdahl. Freight in this economy. The getting of goods from there to here comes in a couple of three main varieties. Trucking, that's the lion's share. Air freight, when you've got to get whatever it is moved real quick. And then ships. Coastal ports tend to get all the glory because that's where a lot of the stuff you buy on Amazon comes into the country. But some of the busiest ports in this country are on the Great Lakes. Last weekend, a group of people who

understand just how important great late shipping is gathered to pray for fair winds and following seas. From Ashtabula, Ohio, Marketplace's Kelly Wells reports. Since the 1940s, the residents of this city in the very northeast corner of Ohio have been gathering where the Ashtabula River flows into Lake Erie after the lake has thawed and the freighters have set sail. Welcome to the 77th annual blessing of the fleet here in the beautiful Ashtabula Harbor on the banks of the Asthubula River. The program features a memorial service for fallen sailors, and a prayer led by a retired priest from the local Catholic Church. Protect them from the dangers of wind and rain and all the perils of the deep. Folks here take this seriously, because Lake Erie on a perfect June day may not look perilous,

but... Holy mackerel. Christine Seafurt of the Community Association that hosted today's event says looks can be deceiving. When it blows up on Lake Erie, it blows up quick. Shallower water means storms make waves much faster and closer together. Federal seaway pilot Gunnar Luta, who's sitting quietly in the audience, has experienced the rough seas of Lake Erie before, like on Christmas Eve 25 years ago. We were taking waves over the top of the pilot house. We lost our lifeboat, lost everything except for our GPS, lost our radar, and I was able to navigate into the harbor using an old paper chart.

Luda says his job's only getting busier every year, with hundreds of ships and billions of dollars of cargo passing through Lake Erie annually. Expand that to include the Great Lakes and inland waterways, and it's nearly 700 million tons of cargo every year, according to the American Great Lakes Ports Association. A lot of steel and a lot of grain, those are the primary things, but there's also project cargo like windmill parts, mass sections and blades for windmills and engines. and all sorts of stuff. All of that travels on the Great Lakes because they're close to a lot of steel mills and grain growing areas. The cargo is the grain that'll feed the cow

that'll end up on your Fourth of July burger, the steel that'll go into your next car, the salt that'll make your roads safer next winter, some of which comes from a giant salt mine underneath Lake Erie, not far from Ashtabula. Jonathan Ernest is an economics professor at Case Western Reserve University. The most efficient way to ship a whole bunch of salt

that you mind under the lake is to ship it on top of the lake versus putting it out of a whole, whole lot of trucks and trying to send it that way. Ships cut down on fuel use, pollution, and road congestion, and they save money. So the demand for them on the Great Lakes isn't going anywhere, which also means... We pray that those who use these boats and ships...

That residents of Burns Harbor, Indiana, and Bayfield, Wisconsin, and Harbor Springs, Michigan are going to keep showing up to their respective harbors every year and do what they can to make sure those ships get where they're supposed to go. Amen. In Ashtubula, Ohio, I'm Kaylee, Wells for Marketplace. There was a story in Fortune the other day that caught my eye, as much for the headline as for what the story seemed really to be about.

Gen Z is rejecting $200 dates and choosing solo maxing the headline read. That's maxing with two Xs, by the way. Solo maxing and dating apps are taking a hit, just a few. finish the headline. Sydney Lake is an associate editor at Fortune. She had the byline on the piece. Sydney, welcome to the program. It's good to have you on. Thanks so much for having me. Just so we're all using the same terminology here, solo maxing. What is it? Yeah, so solo maxing. If you have been on social media or just the internet in general, the past few months, there have been a lot of different plays on the word maxing, just basically means maximizing,

You know, you might have heard it in the context of looks maxing, protein maxing, whatever it may be. But solo maxing really is about younger generations just embracing being single. Being single and not dating because, at least for some cause and effect here, it's expensive out there. It is very expensive. From my research, it's showing that Gen Zine millennials, are spending around $200 or so to go. Really? I mean, I haven't dated in a very long time, but, ouch.

Yeah, restaurant prices, going to the movies, everything is just crazy, expensive out there. So what then happens? Because, look, as you know, because you've done this reporting, we are in a long epidemic of loneliness and people just not having enough interaction. It screens. It's the pandemic.

all of that. And now it seems people are kind of, anyway, the younger generation are kind of making that choice actively, right? Yeah. In a lot of cases, they're just really embracing this. You know, some of it comes from dating out burnout. Some of it is just embracing financial security. They don't really see it necessarily as avoidance or isolation. It's what they're saying is, self-care. It is definitely not self-care for a lot of these dating apps, though, right? I mean, they're seeing this sort of in the bottom line. Yeah. So dating apps, really ever since the pandemic, have seen some ups and downs, but Gen Z especially has been pretty reluctant to go the dating app route. A lot of the major dating app companies are working tirelessly to, you know, figure this whole thing out,

because they had been so so popular, especially during the pandemic era. Right. There is even at least one dating app out there. There are others like budget services, right? Like if you don't feel like spending a lot of money in a dating app, try us. Yeah, I've heard of that. And, you know, some other dating apps, you know, have done some promos here and there of, hey, we'll give you a free ride credit, you know, gas or taking a lift or an Uber is financial

mentally restrictive, you know, some have been saying, hey, we'll cover that for you. So there's some clever workarounds. This seems kind of, just to get subjective about this for a minute, it seems kind of sad. No? No, it is. Dating app culture has, I think, really changed the outlook for a lot of younger generation. Social media certainly plays a role in it, at least I think. But, you know, at the same time, it can also be healthy to have at least a little bit of time here and there to focus on yourself. So, you know, I'm hopeful and I'm seeing more things here and there of people embracing in-person things like concerts, going out to eat, that sort of thing. But, you know, then obviously on the flip side, everything is is more expensive too. So it's hard out there.

It is hard out there. Sydney Lake. at fortune. Sydney, thanks a lot. I appreciate your time. Thank you so much for having me. This final note on the way out today in which the data backs up that whole solo maxing thing that Sydney Lake and I were just talking about. The Census Bureau released its annual time use survey today, literally how Americans have been spending their time in the preceding year. Shout out, by the way, to economist Joey Politano for spotting this.

The amount of time we spent socializing in person is down again. just 35 minutes a day, up a bit from its pandemic low, but still down 10% from 2019, off 25% in 2003. Our daily production team includes Andy Corbyn, Maria Hollenhorst, Sarah Leeson, Sean McKenry, and Sophia Terenzio. Bull Story is the supervising senior producer, and I'm Kai Rizdal. We will see you tomorrow, everybody. This is 8 p.m. We're approaching the end of our budget year here at Marketplace, and your support is, crucial to powering economic reporting that puts you first. And if we hear from 500 listeners

before June 30th, you'll help unlock $50,000 from the Marketplace Investors Challenge Fund. So don't wait, give now, and support this nonprofit public media service. Marketplace is here for everyone, and it's powered by you. So please donate at Marketplace.org. And thanks.