Shelter inflation also contributes to the higher-than-expected reading.
Consumer prices accelerated for the second straight month in April as the war in Iran added to renewed inflationary pressures.
The annual inflation rate rose to 3.8 percent, from 3.3 percent in March, according to new Bureau of Labor Statistics data released on May 12.
This is now the highest level of inflation since May 2023.
Last month’s headline reading came in above the consensus estimate of 3.7 percent.
On a monthly basis, the consumer price index (CPI) rose 0.6 percent, in line with market forecasts.
Energy accounted for more than 40 percent of all monthly increases. The index rose by 3.8 percent, fueled by a 5.4 percent jump in gasoline.
Gas prices have risen sharply since the outbreak of the 11-week-old conflict in the Middle East, up about 50 percent. This is the result of soaring oil markets, with a barrel of West Texas Intermediate—the U.S. benchmark for crude prices—above $100.
The national average for a gallon of gasoline is $4.50, according to the American Automobile Association.
The food index also lifted April’s inflation, rising 0.5 percent. Supermarket prices advanced 0.7 percent following the previous month’s 0.2 percent decline.
Protein foods reaccelerated last month as beef and veal climbed almost 3 percent. Pork rose 0.6 percent, ham rose 0.3 percent, and fish and seafood rose 1.5 percent. Eggs, which have cratered over the last year, also advanced 1.5 percent.
Excluding food and energy, the 12-month core inflation rate rose to 2.8 percent in April, from 2.6 percent—the highest since September 2025.
Core inflation also edged higher by 0.4 percent, above economists’ expectations of 0.3 percent.
“Inflation is moving higher again as the war in Iran—and the associated closing of the Strait of Hormuz—is impacting both the headline number as expected, but also the Core,” Chris Zaccarelli, CIO of Northlight Asset Management, said in a note emailed to The Epoch Times.
Underlying inflation pressures could be building as higher energy costs filter through the broader economy. Monetary policymakers tend to look past oil price spikes and focus on structural inflation, since their decisions have little influence over geopolitical developments and energy shocks.
By Andrew Moran
