AI Generated Image
America In Focus: key inflation gauge surges to 3-year high, mortgage rate climbs
AP News • • business
Key Points:
- The Federal Reserve’s preferred inflation gauge hit a three-year high in May, with consumer prices rising 4.1% year-over-year, driven mainly by higher gas prices and increased costs for semiconductors amid AI demand.
- Apple raised prices on Macs and iPads due to a memory chip shortage caused by the AI boom, with notable increases such as the entry-level MacBook Neo rising from $599 to $699.
- The U.S. economy grew at a 2.1% annual pace in the first quarter of 2026, rebounding from a sluggish end to 2025, fueled by strong business investment likely linked to AI, although consumer spending declined amid rising gas prices.
- Average 30-year mortgage rates in the U.S. edged up slightly to 6.49%, maintaining elevated borrowing costs that reduce homebuyers' purchasing power, while 15-year fixed rates also increased.
- Jobless aid applications fell to 215,000 last week, indicating continued low layoffs despite economic uncertainties, and Wall Street ended the week positively after oil prices stabilized, although AI stock declines tempered gains.
