US consumer prices rose sharply again last month as the 10-week war with Iran raised energy prices.
The Labor Department’s consumer price index rose 3.8 percent from April 2025, according to data released Tuesday. On a month-over-month basis, April prices rose 0.6 percent from March as gasoline prices rose 5.4 percent during the month; The month-on-month gain fell from 0.9 percent from February to March.
Statistics from the Department of Labor revealed that the price of fuel is 28 percent higher than last year. AAA says the average gallon of gasoline is costing motorists more than USD$4.50 a gallon, about 44 percent more than it cost last year at this time.
Excluding food and energy costs, so-called total consumer prices rose 0.4 percent last month from March and 2.8 percent from April 2025, a modest reading that suggests the explosion in energy prices is no longer spilling over to other prices.
Food prices rose 0.7 percent from March to April, as the price of meat rose, after falling slightly the previous month.
Inflation has been easing since a 9.1 percent year-on-year rise in prices in June 2022, a blow caused by supply chain shutdowns at the end of the COVID-19 shutdown and energy price shocks following Russia’s invasion of Ukraine. But inflation remained above the Federal Reserve’s two percent target.
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Then, the United States and Israel attacked Iran on Feb. 28, and Tehran responded by closing access to the Gulf of Hormuz, through which a fifth of the world’s oil and natural gas flows. Energy prices rose in response.
The US Federal Reserve, which was expected to cut interest rates in 2026, has turned cautious as it waits to see how long the contraction lasts and whether higher energy prices spill over into other products and trigger a burst of inflation.
US President Donald Trump criticized the Fed and its outgoing chairman, Jerome Powell, for refusing to lower rates to stimulate the economy. Kevin Warsh, the president’s choice to succeed Powell, is expected to be confirmed by the Senate this week; but it’s unclear whether Warsh will pursue lower rates given the uncertainty from the war — or whether he can persuade his colleagues on the Fed’s rate-setting committee to go along if he tries.
Americans are being squeezed by gasoline prices that have exceeded $4.50 a gallon. Other companies are also starting to feel the pain. For example, Whirlpool, which makes KitchenAid and Maytag appliances, reported last week that revenue fell nearly 10 percent in its latest quarter and said the war had caused a “recessionary slowdown” that had undermined consumer confidence.
© 2026 The Canadian Press
