U.S. consumer prices rose at their fastest pace in nearly three years in April as higher energy costs linked to the war involving Iran pushed inflation sharply upward, adding pressure on households and complicating the economic outlook ahead of the November midterm elections.
The Consumer Price Index rose 3.8% in the 12 months through April, up from 3.3% in March, according to data released Tuesday by the Bureau of Labor Statistics.
The increase marked the highest inflation level since May 2023, with surging gasoline prices accounting for nearly half of the monthly rise.
The escalation in energy costs followed the effective closure of the Strait of Hormuz after the United States and Israel attacked Iran in late February, disrupting a major global oil shipping route and sending fuel prices higher worldwide.
The national average price for a gallon of unleaded gasoline climbed above $4.50, its highest level since July 2022, according to AAA data.
Government figures showed gasoline prices rose 5.4% in April alone and were more than 28% higher than a year earlier.
Food prices also increased, with grocery costs rising 0.7% from March to April as meat prices rebounded.
Airfares surged 20.7% in April as airlines passed higher jet fuel costs on to consumers.
Housing, clothing and other everyday expenses also contributed to the broader rise in prices.
Excluding food and energy, core consumer prices increased 2.8% from a year earlier, suggesting the sharpest pressure remained concentrated in energy-related sectors.
The inflation increase poses a challenge for President Donald Trump and Republican lawmakers ahead of the Nov. 3 elections, particularly after Trump campaigned heavily on lowering consumer prices during his 2024 re-election bid.
Trump described the inflation rise as “short-term” and defended his administration’s focus on preventing Iran from developing a nuclear weapon.
The higher inflation reading has also reduced expectations that the Federal Reserve will cut interest rates this year.
Kevin Warsh, Trump’s nominee to replace outgoing Federal Reserve Chair Jerome Powell, is expected to assume leadership amid growing uncertainty over inflation and economic growth.
At the same time, wage growth failed to keep pace with rising prices for the first time in three years, with average paychecks increasing 3.6% compared with inflation at 3.8%.
U.S. stock markets fell following the report, with the S&P 500 and Dow Jones Industrial Average both opening lower.