Inflation surged to 3.8 percent in April, its highest level in nearly three years, according to data released on Tuesday.
The Labor Department's Bureau of Labor Statistics said the Consumer Price Index rose 3.8 percent from April 2025. On a month-to-month basis, April prices rose 0.6 percent from March as gasoline prices rose 5.4 percent during the month; the month-over-month gain was down from 0.9 percent increase from February to March.
In the 12 months through April, the CPI advanced 3.8 percent. That was the biggest year-on-year increase since May 2023 and followed a 3.3 percent rise in March.
Labor Department figures showed that gasoline prices are up more than 28 percent compared to a year ago. AAA says the average gallon of gasoline costs motorists more than $4.50 a gallon, about 44 percent more than it cost last year at this time.
Excluding volatile food and energy costs, so-called consumer core prices rose 0.4 percent last month from March and 2.8 percent from April 2025, relatively modest readings that suggest the energy price burst isn’t spilling over much yet into other prices.
Grocery prices rose 0.7 percent from March to April, as meat prices rose, after falling slightly the month before.
Inflation had been dropping more or less steadily since peaking with a 9.1 percent year-over-year spike in prices in June 2022, a surge caused by supply chain bottlenecks at the end of COVID-19 lockdowns and an energy price shock following the Russian invasion of Ukraine. But inflation remained above the Federal Reserve’s 2 percent target.
Then, the United States and Israel attacked Iran on Feb. 28, and Tehran responded by shutting off access to the Gulf of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passes. Energy prices rocketed in response.
The Fed, which had been expected to cut its benchmark interest rates in 2026, has turned cautious as it waits to see how long the conflict lasts and whether higher energy prices spill over into other products and cause a broader inflationary outbreak.