US inflation surged in March by the most in nearly four years as the war with Iran sent gasoline prices skyrocketing.
The consumer price index rose 0.9% from February, according to data out Friday. From a year ago, it picked up to 3.3%, the strongest pace since 2024.
A record increase in gas prices was responsible for nearly three-quarters of the monthly advance, the Bureau of Labor Statistics said. Another measure that excludes food and energy costs increased at a slower 0.2% pace.
S&P 500 futures remained higher on the day, and the dollar fell.
The data underscore how the war in the Middle East is quickly rippling through the US economy, worsening the affordability woes many households have faced in recent years. Americans are already experiencing higher prices at the pump, and service providers including Delta Air Lines Inc. and the US Postal Service have warned of price hikes ahead.
Even if the US-Iran truce holds and there's a rapid resolution to the conflict, economists anticipate higher costs are likely to persist in the near term as oil output normalizes. Beyond the energy shock, a disruption in the supply of fertilizer is expected to eventually lead to higher grocery bills, while rising transportation costs could impact all kinds of consumer goods.
Goods, Services
The rise in consumer prices beyond energy was relatively tame in March. The prices of goods excluding food and energy, a category economists and policymakers have been watching closely to gauge the impact of President Donald Trump's tariffs, rose a modest 0.1% for a second month. Used-car prices fell for a fourth straight month.
Grocery costs fell 0.2% on a decline in meat, dairy and egg prices. Bloomberg Economics estimates it could take as long as a year for higher fertilizer costs to impact the CPI.
Services costs excluding energy rose 0.2% in March. Airfares rose 2.7%. Another services gauge Federal Reserve officials watch closely, which strips out housing and energy costs, also rose 0.2%, the slowest pace this year. Shelter prices — which comprise the largest portion of the index — rose 0.3%.
Fed officials are closely tracking the impact the oil shock and the war more broadly will have on prices. Investors see little chance of another interest-rate cut in 2026 amid renewed inflation risks, according to futures, though many economists are maintaining forecasts for one or more reductions later in the year.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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