US Inflation Hits 3.8% in April as Iran War Drives Gas Up 28%
Updated
Updated · Bloomberg · May 12
US Inflation Hits 3.8% in April as Iran War Drives Gas Up 28%
10 articles · Updated · Bloomberg · May 12
April consumer prices rose 3.8% from a year earlier—the fastest since 2023—while inflation-adjusted wages fell for the first time in three years.
Gas prices jumped nearly 28% over the past two months as the US-Israel war with Iran pushed up energy costs, with the Strait of Hormuz still shut and the Trump administration struggling to end the conflict.
Grocery prices, rents and airfares also climbed sharply from a month earlier, raising the risk that households cut spending as essentials absorb more of their budgets.
Consumers have so far kept spending by saving less and leaning on credit, but the savings rate fell in March to a three-year low, signaling less room to cushion prolonged price pressure.
The report suggests the war's economic fallout is now hitting US households directly, threatening broader growth if high fuel costs persist.
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April 2026 Inflation Hits 3.8%: How the Iran War and Oil Shock Are Reshaping the U.S. Economy
Overview
In April 2026, U.S. inflation surged to 3.8% annually, marking the fastest pace in over two years. This sharp rise was mainly driven by geopolitical tensions, especially the US-Israel war with Iran that began in late February. The conflict led to the closure of the Strait of Hormuz, a vital route for global oil exports, causing severe disruptions in oil supply and a 1-billion-barrel shortfall. These events pushed up energy prices, which then fueled broader inflation across the economy, affecting everything from gasoline to food and household costs.