WASHINGTON (AP) — U.S. consumer prices surged again last month, driven by the ongoing 10-week conflict with Iran, which has escalated energy costs.
According to the Labor Department, the consumer price index increased by 3.8% compared to April 2025. On a monthly basis, prices in April rose 0.6% from March, with gasoline prices climbing 5.4%. This monthly increase was slightly less than the 0.9% rise recorded from February to March.
Data from the Labor Department indicates that gasoline prices are more than 28% higher than a year ago. AAA reports that the average price for a gallon of gasoline now exceeds $4.50, marking a 44% increase from the same period last year.
When excluding the volatile categories of food and energy, core consumer prices saw a modest rise of 0.4% from March and 2.8% from April 2025. These figures suggest that the spike in energy prices has not significantly affected other price categories yet.
From March to April, grocery prices increased by 0.7%, with meat prices rising after a slight decline the previous month.
Inflation had been on a downward trend since reaching a 9.1% year-over-year increase in June 2022, a peak attributed to supply chain disruptions post-COVID-19 and an energy price surge following Russia’s invasion of Ukraine. However, inflation has consistently exceeded the Federal Reserve’s 2% target.
On February 28, the U.S. and Israel launched an attack on Iran. In retaliation, Iran blocked access to the Gulf of Hormuz, a critical passage for a fifth of the world’s oil and liquefied natural gas. This action led to a dramatic increase in energy prices.
The Federal Reserve, which was anticipated to lower its benchmark interest rates in 2026, has adopted a cautious approach, awaiting the conflict’s duration and assessing whether rising energy costs will affect other sectors and trigger widespread inflation.
President Donald Trump has criticized the Federal Reserve and its outgoing chair, Jerome Powell, for not reducing rates to stimulate the economy. Kevin Warsh, selected by Trump to replace Powell, is likely to receive Senate confirmation this week. However, it remains uncertain if Warsh will advocate for lower rates given the war-related uncertainties, or if he can convince the Fed’s rate-setting committee to support such a move.
Americans are feeling the strain of gasoline prices exceeding $4.50 per gallon. Businesses are also experiencing difficulties. For instance, Whirlpool, known for KitchenAid and Maytag appliances, recently disclosed a nearly 10% decline in revenue for its latest quarter. The company attributed this to a “recession-level industry decline” caused by the war, which has eroded consumer confidence.
