Inflation in the United States rose to 3.8 percent in April, the highest level in about three years, as the war in Iran causes ripple effects on the US economy, data showed on Tuesday.
Overall, inflation rose in line with economists’ expectations. Compared to the previous month, consumer prices increased by 0.6 percent. The Bureau of Labor Statistics noted that core inflation, which excludes food and energy costs, also rose 0.4 percent from March.
Prices rose across categories, including home furnishings, airfare, personal care, clothing and education. Meanwhile, the cost of new vehicles, communications services and medical care all fell in April.
In addition, energy prices rose by 3.8 percent in April, accounting for more than 40 percent of the total monthly increase in consumer prices. The cost of shelters also increased, increasing by 0.6 percent during the month. Food prices rose 0.5 percent, driven by a 0.7 percent rise in food prices, while the cost of eating out rose 0.2 percent.
Inflation in the US rose from 3.3% in March.
Headline inflation rose 3.8 percent in the 12 months to April, up from 3.3 percent in March and 2.4 percent in February, when it was only slightly above the Federal Reserve’s 2 percent target. Core inflation, which excludes food and energy prices, rose 2.8 percent year-on-year, compared with 2.6 percent in March. Energy prices rose 17.9 percent over the past year, while food prices rose 3.2 percent after an oil shock triggered by the US-Israeli war in Iran that began in late February.
Inflation hitting American wages
As NBC News reports, as inflation continues to rise, it is eating away at American wages at a rapid pace. The pace of wage growth has slowed over the past two years. In November 2025, wage growth accelerated by roughly four percent. In March, it fell to 3.4 percent.
An NBC report published in April showed that Americans are now getting smaller pay raises as tariffs and higher gas prices threaten to make everything more expensive.
Inflation rose faster than wage growth in April, potentially exacerbating affordability pressures already facing consumers.
This is a developing story. Further details were awaited.
