U.S. Inflation Climbs to Two-Year High

(MENAFN) American consumers faced sharply higher costs across a broad range of goods and services in April, as fresh government data pointed to inflation accelerating to its steepest pace in nearly two years.

The U.S. Bureau of Labor Statistics reported Tuesday that the Consumer Price Index climbed 0.6 percent on a seasonally adjusted monthly basis and 3.8 percent compared to the same period last year. Excluding volatile food and energy components, the core index rose 0.4 percent month on month and 2.8 percent annually. The headline annual figure marks the highest inflation reading since May 2023.

Economists widely pointed to the ongoing U.S. war with Iran as a primary driver, with hostilities disrupting oil shipments through the Strait of Hormuz — a critical chokepoint accounting for roughly one-fifth of global oil supply.

Dean Baker, co-founder of the Center for Economic and Policy Research, told media: "The war has sent oil prices higher and we are beginning to see ripple effects in other areas."

The real-world impact on workers is already evident, Baker warned. "Prices are now outpacing wages, meaning that workers are on average worse off than they were a year ago," Baker said.

Energy costs, which surged 3.8 percent monthly and 17.9 percent over the past year, accounted for more than 40 percent of the overall inflation rise. Food prices edged up 0.5 percent month on month and 3.2 percent annually, while gasoline costs skyrocketed 28.4 percent year on year. The cost of eating at home climbed 0.7 percent — the sharpest such monthly gain since August 2022.

Beyond fuel, price pressures spread across multiple sectors. Housing costs rose 0.6 percent after modest cooling in prior months, suggesting inflationary forces extend well beyond the Iran conflict. Airline fares jumped 2.8 percent monthly, posting a striking 20.7 percent annual increase, while clothing prices rose 0.6 percent. Tariff-sensitive categories such as household furnishings also climbed 0.7 percent.

Some relief was noted in selective categories: new vehicle prices dipped 0.2 percent, used car costs held flat, medical care expenses fell 0.1 percent, hospital services dropped 0.3 percent, and health insurance premiums declined 0.4 percent. Vehicle insurance, however, ticked up 0.1 percent.

Policy analysts argue that only two near-term remedies exist — scaling back tariffs and ending the Iran conflict — though skepticism about either outcome runs deep.

Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, said: "Those are the only two things (U.S. President Donald) Trump can do in the short run. Over a longer time period, he could curb the federal budget deficit by cutting spending. None of that will happen."

Inflation first took root in the United States in 2021 under the previous administration.

MENAFN13052026000045017169ID1111107767