America In Focus: Hotter inflation doesn't stop consumers, investors

Business

America In Focus: Hotter inflation doesn't stop consumers, investors

2026-05-16 22:10 Last Updated At：22:20

In the past week, many Americans remained focused on the economy, inflation and how those forces could impact their lives. Trips to the grocery store or gas station are more painful than they were last year, and that is impacting the decisions of both households and businesses.

Here’s a snapshot of prominent economic data and news that occurred over the past week and what it potentially means for you.

U.S. consumer prices climbed sharply again last month as the 10-week war with Iran pushed energy prices higher.

The Labor Department’s consumer price index rose 3.8% from April 2025, according to data released Tuesday. On a month-to-month basis, April prices rose 0.6% from March as gasoline prices rose 5.4% during the month; the month-over-month gain was down from a 0.9% increase from February to March.

Labor Department figures showed that gasoline prices are up more than 28% compared to a year ago. AAA says the average gallon of gasoline costs motorists more than $4.50 a gallon, about 44% more than it cost last year at this time.

U.S. wholesale inflation came in hot last month. Producer prices rose 6% from a year earlier, the most since December 2022, as the 10-week Iran war pushed up energy prices and put pressure on companies to pass along higher costs to consumers.

The Labor Department reported Wednesday that its producer price index — which tracks inflation before it hits consumers — shot up 1.4% in April, the biggest monthly gain since March 2022.

Energy prices climbed 7.8% from March to April and 22.7% from a year earlier. Gasoline soared 15.6% from March and diesel, the dominant fuel used in shopping, jumped 12.6%.

Excluding volatile food and energy costs, so-called core producer prices were up 1% from March and 5.2% from April 2025.

All the numbers were much higher than economists had forecast.

The number of Americans filing for jobless aid rose last week but remains historically low despite the economic uncertainty caused by the war in Iran.

U.S. applications for unemployment benefits for the the week ending May 9 rose by 12,000 to 211,000, the Labor Department reported Thursday. That’s slightly more than the 207,000 new applications analysts surveyed by the data firm FactSet had forecast.

Weekly filings for unemployment benefits are considered a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market.

Despite relatively few layoffs, the labor market appears to be stuck in what economists call a “low-hire, low-fire” state. That has kept the unemployment rate low at 4.3%, but left many of those out of work struggling to find new employment.

Shoppers pulled back on spending in April as higher gas prices fueled by the Iran war meant less money left over for some nonessentials like clothing and furniture.

Retail sales rose a respectable 0.5% in April, but that was slower than the 1.6% growth seen in March, according to Commerce Department data released Thursday. March marked the largest one-month increase in retail spending in more than three years, largely because gas prices rose so rapidly.

Excluding gasoline, retail sales in April were up 0.3%. That’s less than half the 0.7% pace from the previous month, excluding gas station sales.

Sales of previously occupied U.S. homes were essentially flat in April, another lackluster showing for the housing market during what’s traditionally its busiest time of the year.

Existing home sales edged up 0.2% last month from March to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors said Monday. Sales were unchanged compared to April last year.

The latest sales figure fell short of the roughly 4.12 million pace economists were expecting, according to FactSet.

Sales have been hovering close to a 4 million annual pace now going back to 2023, far short of the historic norm that is closer to 5.2 million.

The average long-term U.S. mortgage rate edged lower this week, its first drop after rising the previous two weeks.

The benchmark 30-year fixed rate mortgage rate fell to 6.36% from 6.37% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.81%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. That average rate fell to 5.71% from 5.72% last week. A year ago, it was at 5.92%, Freddie Mac said.

The U.S. stock market was falling from its records Friday and joining a worldwide stock market drop as higher oil prices sent a shiver through the bond market. Stocks that had been caught up in the euphoria around artificial-intelligence technology that rose sharply for most of the week, led the decline Friday.

North America’s largest commuter rail system shuts down as workers strike

NEW YORK (AP) — North America’s largest commuter rail system was shut down Saturday after unionized workers in the New York City area went on strike.

The Long Island Rail Road that serves the city's eastern suburbs ceased operations early Saturday morning after five unions representing about half its workforce walked off the job.

The two sides have been negotiating for months on a new contract, and President Donald Trump’s administration had even interceded to try and broker a deal. But the unions were legally allowed to strike starting at 12:01 a.m. Saturday.

Kevin Sexton of the National Vice President of the Brotherhood of Locomotive Engineers and Trainmen said no new negotiations have been scheduled.

“We’re far apart at this point,” Sexton said early Saturday. “We are truly sorry that we are in this situation.”

Janno Lieber, the MTA chairman, said the agency “gave the union everything they said they wanted in terms of pay” and that to him it was apparent the unions always intended to walk out.

The walkout, the first for the LIRR since a two-day strike in 1994, promises to cause headaches for some sports fans planning to see the crosstown baseball rivals the New York Yankees and Mets battle this weekend or to watch the NBA’s New York Knicks playoff run at Madison Square Garden in Manhattan. Both sports venues have dedicated LIRR stops.

If the shutdown continues past the weekend, the roughly 250,000 people who ride the system to and from work each weekday will be forced to find alternative routes into New York City from its Long Island suburbs.

For many, that likely means navigating the region’s notoriously congested roads.

“People are still going to commute, but if everybody starts driving now, the traffic is only going to get worse,” said Rich Piccola, an accountant who commutes into the city as he waited at Penn Station for a train home Thursday.

Gov. Kathy Hochul is urging Long Islanders to work from home if possible. The MTA has said it will provide limited shuttle buses to New York City subway stations, but that contingency plan wasn't envisioned to handle all the riders the system normally carries on a workday.

And while remote work options greatly expanded during the COVID-19 pandemic, many workers still need to show up in person, said Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA, a commuter advocacy group.

“You work in construction, you work in the healthcare industry, you work at a school or you’re about to graduate from school, that’s not always possible,” she said of telecommuting. “People need to get where they need to go.”

The most recent contract talks have stalled on the question of worker’s salaries and health care premiums.

The MTA has said the unions’ initial demands would have led to fare increases and impacted contract negotiations with other unionized workers.

The unions, which represent locomotive engineers, machinists, signalmen and other train workers, have said more substantial raises were warranted to help workers keep up with inflation and rising living costs.

Duane O’Connor, who was picketing on Saturday morning at Penn Station, said that while he regrets the impact on commuters, workers are simply asking for fair wages.

“I feel terrible. Terrible. This is going to hurt. This is going to hurt the island, this is going to hurt the city ... All we are asking for is fair wages. Record inflation the last few years. Our contract goes back three years, it’s not going forward, so we went through those record inflationary years and they’re trying to lowball us,” he said.

Some riders, while sympathetic to the union’s affordability concerns, worry they’ll bear the brunt of any pay raises.

If the unions get the pay increases they are looking for, "it will come at the expense of our riders who will see next year’s 4% fare increase doubled to 8%,” Gerard Bringmann, chair of the LIRR Commuter Council, a rider advocacy group, said in a statement. “Like the union workers, we too are burdened by the increase in the cost of living here on Long Island.”

With Hochul, a Democrat, facing reelection later this year, the pressure might be on the MTA to strike a deal to end the shutdown, said William Dwyer, a labor relations expert at Rutgers University in New Jersey, where commuter rail workers staged a three-day strike last year.

“She’s up for reelection, and Long Island is a critical vote for her,” he said. “So if there’s a significant fare hike, that does not bode well for her on Election Day.”

Follow Philip Marcelo at https://x.com/philmarcelo