Inflation picked up speed in April: consumer prices were 3.8% higher than a year earlier, the biggest annual rise since May 2023, the Labor Department reported. Month-to-month, prices increased 0.6% from March to April.
Here are three areas where costs have risen noticeably and why they’re pushing overall inflation higher.
Gasoline is a major driver
Fuel prices have surged since the U.S. launched its war with Iran, and gasoline has been a leading contributor to the April increase. AAA says the national average for regular gas is about $2.50 a gallon, roughly 38 cents more than a month earlier. The jump in energy prices accounted for about 40% of the monthly increase in the consumer price index for April.
Rising fuel costs are spilling over into other prices
When energy costs climb sharply, they ripple through the economy. Jet fuel and other energy expenses have pushed airfares up 2.8% in April alone; airfares are more than 20% higher than a year ago. Diesel fuel has also risen substantially — by about $1.88 a gallon since the conflict began — and sustained higher diesel prices would tend to increase costs for goods transported by truck or rail.
Excluding volatile food and energy items, so-called “core” inflation was 2.8% in April, showing that much of the recent pickup in headline inflation is linked to energy and related supply effects.
Housing costs contributed, too
Housing prices rose 0.6% between March and April, making housing another component of April’s inflation increase. Part of that gain reflects a statistical quirk: a six-week government shutdown last fall left officials unable to collect some housing price data in October, which temporarily depressed the year-ago comparison. April’s report effectively includes a catch-up that lifts the measured housing inflation rate.
Bottom line: energy — especially gasoline and diesel — is a key factor behind the recent rise in inflation, with spillover effects into travel and transportation costs, while housing measures in April were boosted in part by last year’s data gap.