REVEALED: The five US cities hit hardest by inflation - and where prices are rising slowest

A new study has named the top five U.S. cities hit the hardest by inflation, as well as the five cities where prices aren't rising as quickly.

According to a recent study from WalletHub, Dallas, Detroit, Honolulu, San Francisco and Seattle are the cities where residents are feeling the effects of inflation the most.

The study's findings were based on key inflation metrics within 23 major metropolitan statistical areas in connection with the most recent data, data from two months ago, and data from a year ago from the Consumer Price Index.

While inflation reached 3.3% nationwide in May compared to last year, some cities experienced a steeper rise in prices.

According to a WalletHub study, Detroit (3.5%), San Francisco (3.8%), Seattle (4.4%), Dallas (5.0%), and Honolulu (5.2%) all saw higher inflation rates.  

On the flipside, some cities have hardly felt the effects of inflation, reporting increases between 1.8% and 3.2%. These cities include San Diego, Atlanta, Denver, Minneapolis and Tampa.

Dallas is grappling with especially high inflation, driven in part by a lack of available housing. This shortage is pushing up the cost of rent and mortgages, Dean Stansel, a research economist at Southern Methodist University, told CBS Moneywatch.

The influx of new residents - 150,000 between July 2022 and July 2023 - has outpaced the construction of new homes, creating a competitive market for housing.

'Government restrictions on the construction of new housing are making it difficult for supply to keep up with demand,' Stansel said. 'That housing shortage is driving prices higher than they would otherwise have been.'

Minimum wage hikes resulting in higher labor costs to local businesses is another factor as to why cities, such as Seattle, are especially feeling the effects of inflation.

'Those higher labor costs lead to higher prices for the output of firms using minimum wage labor, such as fast-food restaurants and grocery stores,' Stansel said. 

'Those higher prices for inexpensive food are particularly burdensome for those with low incomes struggling to make ends meet.'

The Federal Reserve decided to hold its key interest rate steady and signaled a more cautious approach to lowering rates after the most recent CPI data was released

While they anticipate a single rate cut this year, the Fed hasn't revealed when the rate cut will happen.

The data also revealed the price of airfare, furniture, clothing, new vehicles, energy and recreation fell in May, which helped keep inflation at bay.

However, shelter costs increased for the fourth month in a row, upwards of 0.4%. 

Included in increased price points are medical care, used cars and trucks, education costs, and food away from home also edged up. 

Two of the biggest factors stopping inflation from decreasing are shelter and fuel costs, according to economists.

'The expectation is that inflation in these areas should eventually fall as these price effects run their course in different markets, but this is admittedly taking longer than many initially predicted,' Grant Black, an economist at Lindenwood University, said in WalletHub's study. 

'The expectation is that inflation in these areas should eventually fall as these price effects run their course in different markets, but this is admittedly taking longer than many initially predicted,' Grant Black, an economist at Lindenwood University, said in WalletHub's study. 

'Thankfully, recent inflation data show that food and fuel prices have begun falling modestly, which is a benefit to consumers' budgets.'