US Inflation Increased To 3.8% Last Month As War With Iran Continues
According to data from the Bureau of Labor Statistics, US inflation rose to 3.8% in April as the war in the Middle East continues to drive energy prices and everyday costs up in America. Prices rose by the same percentage within the past year, marking the highest jump since 2023.
This is the second official measure of the consumer price index, which measures the price of basket goods and services since the beginning of the war with Iran. In March, prices rose 3.3%, up from 2.4% in February, according to reports.
In April, energy prices rose 3.8%, accounting for over 40% of the overall monthly increase. Gas prices rose by 28.4%, with the national average price for a gallon of gas steadily increasing every month since the US-Israel war with Iran began.
The Guardian reported that higher energy prices directly correlates with the ongoing closure of the strait of Hormuz, where a fifth of the world’s oil and gas typically passes through.
Oil prices are climbing this week after Donald Trump called Iran’s response to US peace proposals “totally unacceptable.”
Airfare pricing has also increased 20.7%. Costs essential to everyday living are also increasing, including food (3.8%) and energy services like electricity and utilities (5.4%).
Australia, Canada, South Korea, and other nations are also experiencing rapid inflation. According to a new survey from PwC, British households are also bracing for an increased cost of living. Asia’s manufacturing sector has also reported signs of strain with increased costs.
The Trump administration is continuing to campaign for lower interest rates to make borrowing money in the US cheaper. The Fed usually increased interest rates during times of high inflation to cool off spending and lower prices.
Incoming US Federal Reserve chair Kevin Warsh has emphasized that he believes interest rates should be lower, and rising inflation may make it more difficult for him to be able to make the case to do so.
Warsh needs to convince the rest of the Fed’s 11 voting members that despite these increased prices, the Fed should continue to cut rates. Only one member of the board voted to lower rates at its meeting last month over slow job growth and uncertainty in the Middle East.
Rates are currently sitting at 3.5% to 3.75%.
The US Senate is expected to confirm Warsh as Fed chair in the coming days and the end of ongoing Fed chair Jerome Powell’s term is Friday.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
