Inflation surges to 3.8% in April as the war in Iran spikes gas and food prices

U.S. consumer prices climbed sharply again last month as the 10-week war with Iran delivered higher gasoline prices and more pain for Americans. The Labor Department’s consumer price index rose 3.8% from April 2025, the biggest jump in three years, and up from a 3.3% year-over-year gain in March. On a month-to-month basis, April prices rose 0.6% from March as gasoline prices rose 5.4%, according to the data released Tuesday. The month-over-month gain was down from a 0.9% increase in overall prices from February to March, when the initial financial shock from the war hit the U.S. economy. Labor Department figures showed that gasoline prices are up more than 28% compared with a year ago. However, the AAA motor club listed the average regular gallon of gasoline above $4.50 on Tuesday, about 44% more than it cost last year at this time. Excluding volatile food and energy costs, so-called consumer core prices rose 0.4% last month from March and 2.8% from April 2025, relatively modest readings that suggest the energy price burst has yet to spill over more broadly into prices for other goods. Grocery prices rose 0.7% from March to April as meat prices rose after they had declined slightly in the month before. Prices are rising at a time when Americans are already frustrated by the high cost of living. Affordability is likely to be a key issue when voters go to the polls November 3 to determine whether President Donald Trump’s Republican Party maintains control of the U.S. Senate and House of Representatives. “Inflation is the key drag on the U.S. economy now,” Heather Long, chief economist at Navy Federal Credit Union, wrote. “There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households, and they know it. They are having to cut back on spending and stretch every dollar.” In April, average hourly wages fell 0.3% from a year earlier after accoun