US consumer inflation jumps as Iran war sends energy prices higher

Inflation had been dropping more or less steadily since peaking with a 9.1 per cent year-over-year spike in prices in June 2022

US consumer prices climbed sharply again last month as the 10-week war with Iran pushed energy prices higher.

The Labor Department’s consumer price index rose 3.8 per cent from April 2025, according to data released on Tuesday. On a month-to-month basis, April prices rose 0.6 per cent from March as petrol prices rose 5.4 per cent during the month; the month-over-month gain was down from 0.9 per cent increase from February to March.

Labor Department figures showed that petrol prices are up more than 28 per cent compared with a year ago. However, the AAA motor club listed the average regular gallon of petrol above US$4.50 on Tuesday, about 44 per cent more than it cost last year at this time.

Excluding volatile food and energy costs, so-called consumer core prices rose 0.4 per cent last month from March and 2.8 per cent from April 2025, relatively modest readings that suggest the energy price burst has yet to spill over more broadly into other prices.

Grocery prices rose 0.7 per cent from March to April as meat prices rose. Those prices had retreated slightly the month before.

“Inflation is the key drag on the US economy now,” Heather Long, chief economist at Navy Federal Credit Union wrote. “There is a real financial squeeze under way. 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.”