Consumer squeeze: Inflation hits highest level in three years

Added: 2026-05-30

[00:00:00]Your money isn't going as far as it once was. Inflation continues to remain stubbornly high. Scripps News senior national correspondent Jay Gray dug into those numbers. And Jay, as I I told you, my my mother could stretch a chicken five ways to to Sunday, but even she would be scratching her head at the checkout line these days. So, what are these numbers telling us?

[00:00:19]>> Yeah.

[00:00:21]Yeah, Del, you're absolutely right. And I bet each day was better than the first. Look, new data out today really showing that inflation is continuing to remain high. That's no surprise to many of us. That's from the personal consumption expenditures index. That's a key inflation gauge and the one that's most important to the Federal Reserve.

[00:00:41]The data appearing to show for many of us, it's going to be an expensive summer.

[00:00:46]>> American consumers continue to face higher prices. Inflation up 4/10 of a percent at April and 3.8% from a year ago, the highest annual level in nearly 3 years. Meanwhile, personal income remains nearly flat, while the personal savings rate dipped sharply.

[00:01:04]>> The big takeaway from what we're seeing with respect to consumers is that they are saving less, they're spending about the same, but their income is not keeping up with inflation. This is not a recipe for stability in the long term.

[00:01:20]>> A driving factor behind inflation, soaring gas prices. The national average for a gallon of gas is actually down 13 cents in the last week, but still up nearly 50% since before the war with Iran.

[00:01:33]>> It's definitely a lot more expensive than it used to be.

[00:01:37]>> The president continuing to say gas prices will drop when the war ends.

[00:01:41]>> Those prices are going to come down.

[00:01:42]They're going to come down fast.

[00:01:43]>> But some worry they could creep back up with negotiations still ongoing with Iran.

[00:01:49]>> Ultimately, as those negotiations fail to finalize an agreement, we may continue to see gas prices rising over the course of the summer.

[00:01:58]>> Still, the administration continues to tout an economy they say is resilient, but many Americans aren't so sure. Just 16% of US adults say the economy is excellent or good in a recent Gallup poll with 49% saying it's performing poorly. That's the highest poor rating since 2022.

[00:02:20]>> Yeah, and revised GDP data that's also out today shows the US economy grew 1.6% in the first quarter of the year. Now, that's down a bit from Commerce Department estimates earlier in the year.

[00:02:34]>> Jay, you know, most of us gauge how we're doing based on how much money we have in our savings accounts. The Fed is also going to be taking a look at our savings accounts and also those numbers.

[00:02:44]What does that mean when they meet next month?

[00:02:48]>> Yeah, I know you're absolutely right. We mentioned that these numbers are from the Fed's most preferred inflation gauge. They'd like to see them at around 2%. Clearly, it's well above that. The new Fed chair, Kevin Warsh, is more open to rate cuts. Treasury Secretary Scott Bessent, as you talked about, says he believes the administration and the new Fed chief are on the right track. Here's what he said at the White House today.

[00:03:14]>> I I believe that we will get get through the this challenging period now. They're on higher prices. On the other side of this, I've said publicly that I think we'll be back to substantial disinflation, but most importantly, I think we've got the Warsh Fed now. It's a new day at the Fed. The Treasury Secretary and the Fed chair have lunch or breakfast every week. I had my first breakfast with Chair Warsh this morning, and I believe that he will do the right thing to balance inflation and growth.

[00:03:49]>> Yeah, let's bottom line it here.

[00:03:50]According to one rate forecast tracker, there's nearly no chance of a rate cut at the Fed's June meeting. In fact, it's now actually predicting a higher likelihood of a rate hike later this year. So, a lot to watch, a lot unfolding here, Del.

[00:04:05]>> Scripps News senior national correspondent Jay Gray. Jay, thank you very much.