US Inflation Cools, but NJ Households Still Feel Heat

Focus NJ

By Elissa Frank, Executive Director of Focus NJ  On Jul 31, 2025

The May Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics offered a glimmer of hope that inflation may finally be easing – at least on the national level. But here in New Jersey, residents may not be feeling relief just yet.

Nationally, prices rose just 0.1% in May, a slower pace than April’s 0.2% increase. Over the 12-month period ending in May, inflation climbed 2.4%, with core inflation – excluding the volatile food and energy categories – up 2.8%. It’s a sign that the Federal Reserve’s efforts to tame inflation may be taking hold. However, that’s only part of the story.

Zooming in on the New York-Newark-Jersey City metro area, which includes much of North Jersey, prices were essentially flat in May after a 0.4% jump in April. But on an annual basis, inflation in our region remains above the national average, clocking in at 3.4%, with core inflation at 3.6%.

Grocery and restaurant bills are still climbing, with food prices up 0.7% in May – more than double the increase seen across the broader Northeast. Energy prices in the region fell slightly, thanks in part to lower gasoline costs, though that relief has been inconsistent and often short-lived for commuters and businesses alike.

Perhaps most concerning for New Jersey families is the continued rise in shelter costs. Nationwide, shelter rose 0.3% in May and 6.0% year-over-year, and our state is feeling that burden acutely. Rent, home prices, and associated costs remain some of the steepest in the nation, outpacing wage growth and stretching household budgets thin.

While the flat month-over-month reading may suggest inflation is moderating, the day-to-day reality for many New Jerseyans tells a different story. Costs remain elevated, and essential goods and services continue to outpace earnings.

Future CPI reports will be closely watched, particularly for shifts in housing and food prices. For now, while Wall Street might breathe a sigh of relief, Main Street in New Jersey is still waiting for inflation to truly ease.

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