Inflation surged in May, new data shows. Here’s what that means for South Florida
U.S. inflation accelerated for the third straight month in May, recording its highest annual increase since 2023.
The Consumer Price Index, which measures the costs of goods and services across the U.S. economy, rose 4.2% in May relative to the year before, data from the Bureau of Labor Statistics showed.
Due in part to the war in Iran, energy prices rose 3.9% in May alone and have climbed nearly 24% over the last 12 months. The Bureau’s gasoline index, which measures what consumers pay at the pump, has climbed more than 40% since May 2025. As a result, airline fares jumped almost 27% over the same time period.
“Inflation remains a real and ongoing concern for consumers, particularly when it comes to essentials like gas and energy costs,” said Nick Miceli, president of TD’s Southeast Metro region.
And, on the back of a stronger-than-expected jobs report earlier this month, Wednesday’s inflation data further reduces the likelihood that the Federal Reserve will lower interest rates at its rate-setting meeting later next week.
Will it be harder to buy a home?
At 3.75%, interest rates remain stubbornly high, making it difficult for buyers, particularly those looking to purchase their first home, to enter the market. But with the U.S. economy showing signs of heating up, the Fed is likely to take a cautious approach, at least in the short-term, by maintaining interest rates to keep inflation from rising more.
Likewise, Miceli pointed out, other mounting costs have strapped homeowners’ — or would-be homeowners’ — budgets. Household insurance prices, for instance, rose nearly 7% year-on-year, according to the Bureau of Labor Statistics data.
And especially in hurricane-prone Florida, insurance, maintenance and, for condo owners, special assessment costs have made homeownership increasingly costly.
“Elevated costs for housing, insurance and everyday essentials are being felt acutely” in South Florida, said Miceli.
“That’s influencing both consumer behavior and homebuying activity,” he added.
This story was produced with financial support from supporters including The Green Family Foundation Trust and Ken O’Keefe, in partnership with Journalism Funding Partners. The Miami Herald maintains full editorial control of this work.
