Inflation surges to 3 year high....

'Out of control': Inflation surges to highest point in 3 years, driven by energy

Gasoline has risen above $4.50 per gallon, nearly $1.40 more than what it was a year ago.

By Sam Sutton

Inflation climbed faster than at any point in the last three years in April as fuel and food prices surged due to the war in Iran.

The Labor Department on Tuesday reported that the consumer price index increased at an annual rate of 3.8 percent — the highest since May 2023 — with rising energy costs accounting for more than 40 percent of the spike. Food prices at grocery stores and restaurants also rose, and shelter prices shot up. Core inflation, which excludes food and energy costs, ticked higher at a rate of 2.8 percent.

The rapid escalation of living costs has created a political headache for the White House and Republicans as they prepare for a bruising midterm election season that will be defined by affordability issues. A new CNN poll conducted by SSRS found that just 30 percent of Americans approve of President Donald Trump’s handling of the economy, an area that had been the president’s strong suit prior to his second term. An overwhelming majority — 75 percent of Americans — think the war with Iran has had a negative effect on their finances.

“Today’s inflation data confirms what everyone can see: Costs are out of control, and President Trump is responsible,” Rep. Brendan Boyle (D-Pa.), the ranking member of the House Budget Committee, said in a statement.

In a statement, White House spokesperson Kush Desai reaffirmed Trump’s position that the disruptions from the conflict are temporary and that the president’s “long-term economic agenda continues to deliver.”

Desai also attributed a recent decline in prices for hospital services and drug costs to Trump’s health care agenda, and added that the administration “remains laser-focused on delivering growth and affordability on the home front while working to eliminate the Iranian nuclear threat.”

Trump has been buoyed in recent weeks by favorable reports indicating the economy has avoided strain despite the shock to global energy supplies. GDP grew at an annual rate of 2 percent during the first three months of the year — improving on the weak expansion reported at the end of 2025 — and back-to-back jobs reports surpassed expectations, which has spurred hopes of a labor market rebound. But that resilience has failed to improve Trump’s political standing with voters, and the GOP’s inability to sway Americans on pocketbook issues has weakened the party’s prospects for the midterm elections.

The near-closure of the Strait of Hormuz has damaged supply chains for 20 percent of the world’s oil and gas supplies as well as other commodities that are key inputs for the production of food, semiconductor chips and plastics.

The price of gas has risen above $4.50 per gallon, nearly $1.40 more than what it was a year ago, according to AAA. Industry analysts expect fuel costs to remain elevated even if traffic picks up through the Strait of Hormuz. Gulf state officials have cautioned that it could take months, even years, to rebuild the energy infrastructure that has been damaged during the conflict.

The release of strategic petroleum reserves and sanctions relief on Russian and Iranian oil supplies have failed to quell price increases. Trump over the weekend suggested a reprieve on federal gas taxes, a policy that has found currency with right-wing populists like Sen. Josh Hawley (R-Mo.) on Capitol Hill.

But the president’s affordability woes were a problem before voters were getting reminded of rising prices with each trip to the gas station. And his broader cost-of-living agenda — which includes programs to address prescription drug prices and housing market reforms — hasn’t broken through.

Tuesday’s CPI report contained data suggesting tariff-related price increases have moderated, particularly with regard to certain goods like home furnishings, and the spike in shelter prices was largely due to statistical distortions that occurred when the government shutdown disrupted operations at the Bureau of Labor Statistics last year.

But the rise in overall inflation “matters a lot for consumer pocketbooks,” said Matt Bush, a managing director for macroeconomic research and market strategy at Guggenheim Partners. And that could be a “hit to real income growth and a risk to consumer spending moving forward.”