Inflation hits 3.8% in April as Iran war drives energy costs

U.S. inflation rose to 3.8% in April, the highest level in nearly three years, driven by surging energy costs tied to the ongoing war in Iran. The Consumer Price Index (CPI) increased 0.6% from March, according to the Bureau of Labor Statistics (BLS). Energy prices, which accounted for over 40% of the monthly increase, jumped 3.8% in April and 17.9% year-over-year. Gasoline prices soared 28.4% annually, reaching a national average of $4.50 per gallon. Airline fares also rose 20.7% over the past year, reflecting higher jet fuel costs. Core inflation, excluding volatile food and energy prices, increased 2.8% annually, remaining above the Federal Reserve's 2% target. Real average hourly wages declined 0.3% year-over-year, marking the first annual drop in purchasing power since April 2023. The conflict in Iran has restricted oil supplies through the Strait of Hormuz, a critical global shipping lane, pushing Brent crude prices to $107 per barrel. President Donald Trump rejected Iran's latest peace proposal, further escalating tensions. Economists warn that elevated energy prices could sustain inflation near 4.5% or higher if the conflict persists. The Federal Reserve is unlikely to cut interest rates this year amid persistent inflationary pressures.