Iran War Sends Gas Prices Higher, Lifting U.S. Inflation To 3.8% Annually

• April 2026 monthly inflation was 0.6%, following 0.9% in March 2026, indicating a re-acceleration of prices.
• Annual overall inflation hit 3.8% and core inflation (excluding food and energy) was 2.8%, both above the Fed's 2% target.
• Energy prices are the main driver, with fuel oil up 54.3% and gasoline up 28.4% year-over-year, while food prices (e.g., tomatoes up 39.7%) and airfares (up 20.7%) also saw significant increases.

The April Consumer Price Index (CPI) reveals that annual inflation reached 3.8%, with core inflation at 2.8%, both exceeding the Federal Reserve's 2% target. Energy prices, driven by oil supply shocks from the Iran War, are the primary contributors, alongside notable increases in food prices and airfares.