Economists expect a key inflation gauge set to be released on Wednesday to show that U.S. consumer prices in May rose at their fastest pace in more than three years. 

The Consumer Price Index is forecast to have risen last month at an annual rate of 4.2%, up from 3.8% in April, according to economists polled by financial data company FactSet. That would be the highest since April 2023, when inflation rose at a 4.9% rate, according to government data.

So-called core CPI, which excludes volatile food and gas prices, is forecast to have risen much more modestly in May to an annual rate of 2.9%, from 2.8% the previous month, according to FactSet.

Inflation surged during the pandemic and remains well above the Federal Reserve's 2% annual target. In contrast to the supply disruptions that drove inflation during the COVID-19 crisis, the latest leg up in prices is largely attributable to government policy, including the Iran war, Mark Zandi, chief economist at Moody's Analytics, told CBS News. 

"It's been almost five years since the last time we were at the Fed's target, and I think just wearing down on the collective psyche, it's one reason why people feel so bad about the economy," he said.

Three-quarters of Americans said their incomes aren't keeping up with inflation, according to a recent CBS News poll.

The May CPI data is likely to show that higher energy prices are mostly to blame for ongoing inflation, according to economists. Those figures will capture the rise in fuel prices from mid-April to mid-May. 

More recently, oil and fuel costs have eased, according to CBS News' energy price tracker. The average cost of a gallon of gas in the U.S. is $4.16, down 40 cents from its most recent peak on May 21, according to AAA. Brent crude, the international standard, fell 3.5% on Tuesday to $90.99 a barrel, while West Texas Intermediate, the U.S. benchmark, was down 4.1% at $87.57 a barrel.

Beyond what the latest CPI reveals about energy costs, economists on Wednesday will also zero in on the cost of goods and services to assess how higher fuel prices are rippling through the economy, Zandi said. 

"It's not just gasoline prices — it's also diesel prices, which put upward pressure on prices for everything that's put on a truck, from groceries to Amazon packages," he said. "It's now more expensive to fly as airlines have passed through the higher jet fuel costs."