The U.S. war with Iran has pushed inflation to its highest level in almost three years.
Consumer prices in April were up 3.8% from a year ago, according to a report Tuesday from the Labor Department. That was the biggest annual increase since May 2023.
Prices rose 0.6% between March and April.
From gas prices to housing, here are three things to know about the rising cost of living.
Gas prices are a big driver
Gasoline prices have jumped sharply since the war began, snarling tanker traffic in the Strait of Hormuz, a vital corridor for energy shipments. The average price of regular gas is $2.50 a gallon, according to AAA. That's up 38 cents from a month ago. The jump in energy prices accounted for 40% of the monthly increase in the consumer price index in April.
Rising fuel costs are affecting other prices as well
When energy costs jump sharply, it can have spillover effects. Air fares, for example, jumped 2.8% last month and are more than 20% higher than they were a year ago, as airlines struggle with a spike in jet fuel prices. The cost of diesel fuel has risen by $1.88 a gallon since the war began. If that lasts, it could put upward pressure on the price of everything that's delivered by truck or train.
Excluding volatile food and energy costs, "core" inflation was 2.8% in April.
Housing prices also contributed to higher inflation in April
Housing costs were also a driver of inflation, jumping 0.6% between March and April, but some of that is a statistical fluke resulting from the six-week government shutdown last fall. Government number crunchers were temporarily idled in October, so were unable to collect housing prices that month. That's had the effect of artificially lowering the measure of housing inflation. Tuesday's report provides a kind of catch-up.
Copyright 2026 NPR
