The 10-week war with Iran is adding to the strain on U.S. households as consumers face another jump in inflation driven largely by energy costs, according to the Labor Department’s latest consumer price report released Tuesday. The report showed consumer prices climbed sharply again last month, with higher gasoline prices contributing to the latest acceleration.
The Labor Department said the consumer price index rose 3.8% in April from a year earlier, after a 3.3% year-over-year gain in March. On a month-to-month basis, April prices rose 0.6% from March, and the department attributed the increase in part to gasoline prices rising 5.4% over the same span.
The report also reflected how much fuel costs have changed over the past year. Labor Department figures showed that gasoline prices were up more than 28% compared with a year ago, and the AAA motor club reported that the average regular gallon price sat above $4.50 on Tuesday—about 44% higher than it cost a year earlier.
Inflation pressure has been most visible at the pump, but the Labor Department’s breakdown suggested the broader cost-of-living picture is still mixed. The department reported that so-called consumer core prices—excluding volatile food and energy—rose 0.4% from March and 2.8% from April 2025, described in the report as relatively modest readings that indicate energy costs have not yet spread broadly into other goods.
Food costs also moved higher, with grocery prices rising 0.7% from March to April as meat prices rose after they had declined slightly in the month before. The combination of energy-driven headline inflation and slower core growth is likely to shape how consumers weigh their spending options going into a national election, even as many families are already frustrated by the high cost of living.
AP Washington correspondent Sagar Meghani reported that consumer prices jumped again last month, with the Iran war pushing energy prices higher. The war began when the United States and Israel attacked Iran on Feb. 28, the report said, and Tehran responded by shutting off access to the Gulf of Hormuz—through which a fifth of the world’s oil and liquefied natural gas passes—helping drive up oil prices and gasoline.
Fed officials have been watching how long the conflict lasts and whether higher energy prices spill over into other categories. The report said the Federal Reserve, which had been expected to cut its benchmark interest rate in 2026, has turned cautious and is waiting for evidence that inflation risk could broaden beyond fuel.
The new inflation figures land amid political debate over the Fed. Trump has lambasted the Fed and its outgoing chair, Jerome Powell, for not cutting rates to boost the economy, and Kevin Warsh—the president’s hand-picked choice to succeed Powell—was expected to be confirmed by the Senate this week, though the report said it was unclear whether Warsh would pursue lower rates given the uncertainties tied to the war.
Some companies are also beginning to feel the impact. Whirlpool, which makes KitchenAid and Maytag appliances, reported last week that revenue dropped nearly 10% in its most recent quarter and said the war has caused a “recession-level industry decline” that has undermined consumer confidence.
In Iowa, one resident described how higher prices are changing routine spending. Grace King of Ames, 31, said that higher costs in both the food aisle and at the pump are making her cut back on spending for items like clothing, adding, “There’s pressure basically everywhere from the groceries that I buy to the gas to fill up the tank,” and “I’ve severely cut back on my frill spending.”
King said she now makes the short commute to work twice a day and, when she needs to do major shopping, drives to malls in Des Moines instead of spending in ways that were easier when fuel and grocery bills were lower. Her account reflected a broader theme in the report: inflation is eating into what wage gains have provided, turning energy costs from a headline worry into a daily budgeting problem for many households.