WASHINGTON: US consumer inflation surged to a fresh three-year high in May, according to official data released Wednesday, as higher energy prices rippled through the world's largest economy.

The consumer price index (CPI) rose 4.2 per cent year-on-year, up from April's 3.8 per cent, the US Bureau of Labor Statistics said.

It was the highest reading since April 2023, and in line with analyst expectations.

The US-Israel war against Iran, launched in late February, has driven energy prices higher after Tehran retaliated by effectively closing the strategic Strait of Hormuz, through which around a fifth of global oil and gas shipments normally pass.

US President Donald Trump has said the price shock will be temporary and that a peace deal will be reached soon, but rising costs have become a key political issue ahead of the midterm elections in November.

Trump's Republican Party will aim to retain control of both houses of Congress but faces a tougher test as higher prices weigh on US households.

May's inflation data showed energy prices jumped 23.5 per cent year-on-year, with gasoline rising 40.5 per cent.

Grocery prices also increased for the second consecutive month, up 2.7 per cent year-on-year.

Americans have faced persistently elevated inflation in recent years, with price pressures remaining high long after the pandemic.

Core consumer price index (CPI) inflation, which excludes volatile food and energy costs, stood at 2.9 per cent in May, up from 2.8 per cent the previous month.

The US Federal Reserve has a long-term 2 per cent inflation target, and its policy-setting committee is due to meet next week to decide on interest rates.

Markets expect rates to remain unchanged at that meeting, but are increasingly pricing in rate hikes later in the year, weighing on equity sentiment.