U.S. consumers won’t be happy with the latest inflation figures. Prices rose in April 2026 at their fastest rate since May 2023. Consumers are starting to feel the impact of the war in Iran, as gasoline prices have increased by around 45% over the past 10 weeks since the war began.
The United States’ Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.6% in April on a seasonally adjusted basis. In March, it had risen by 0.9%.
According to the U.S. Bureau of Labor Statistics, the 12-month inflation rate for all items rose by 3.8% in April.
Definition of Seasonally Adjusted – The term ‘seasonally adjusted’ means that the number or percentage has been corrected (adjusted) to remove normal, predictable changes during the year. Gasoline prices, for example, tend to rise every summer. Therefore, a summer Consumer Price Index may be distorted because of gasoline prices. Statisticians may remove the gasoline price rise from the total, in other words, they will seasonally adjust it.
Energy, food, and shelter prices
Nearly half of the rise in prices was driven by rapidly rising energy costs. Housing and grocery costs also contributed.
The index for energy, which accounts for more than 40% of the monthly all items increase, rose by 3.8% in April 2026.
The indices for shelter and food increased by 0.6% and 0.5% in April, respectively. The index for food at home and food away from home rose by 0.7% and 0.2%, respectively.
Interest rates
The rise in inflation makes it extremely unlikely that the Federal Reserve will reduce interest rates. In fact, many investment managers say that if prices keep rising, Americans are more likely to see interest rate hikes.
During his election campaign, US presidential candidate Donald Trump said he would bring down prices. Millions of voters supported him because of this promise. If high inflation continues until the November midterm elections, the Republican Party could suffer significantly at the polls.
In an article published by CBS News, Mary Cunningham quoted Heather Long, chief economist at Navy Federal Credit Union, who said:
“”Inflation is the key drag on the U.S. economy now. This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains.”
