Inflation ‘is wiping out’ wage gains, economist says

As Americans continue to feel the economic impact of the war with Iran, one economist warns that inflation could hit 4% next month and remain elevated for the rest of the year.

“Inflation will probably hit 4% maybe in May or the June readings,” Heather Long, chief economist at Navy Federal Credit Union, told PBS News Hour’s Geoff Bennett on Tuesday. “If we don’t have a resolution to the Middle East conflict, then we could see, potentially, even higher numbers.”

Long added that inflation will remain “pretty elevated” for the year, even if there’s a resolution to the war.

“This isn’t going away any time soon. And I think consumers will continue to feel that squeeze of inflation being above their wage gains, probably for most, if not all of the year,” she said.

The Labor Department’s latest inflation report, released Tuesday, showed price increases for American consumers in April hit a three-year high, driven by a spike in gas prices. The Consumer Price Index, which includes energy and food costs, rose 3.8% year over year.

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