US Consumer Prices Rose More Than Expected In April

Catenaa, Tuesday, May 12, 2026- US consumer prices rose by 3.8% year on year in April as the war in Iran pressured global fuel and food costs.

The Consumer Price Index for April showed prices were 3.8% higher than a year ago, the largest annual increase in three years, and up 0.6% on a monthly basis, largely due to soaring energy costs. 

Economists had expected a rise of 3.7% from last April, according to a Bloomberg survey, and a 0.6% increase from March, which itself saw the largest monthly gain since 2022.

Energy prices were up 3.8% from the prior month, following a 10.9% monthly jump in March. The overall energy index was 17.9% higher than a year ago, while the gasoline index rose 28.4%.

Stripping out the more volatile energy and food categories, prices on a “core” basis also ticked up more than expected, rising 2.8% in April from a year ago and 0.4% from the month prior. 

Economists had anticipated a yearly increase of 2.7% and a monthly rise of 0.3%, slightly hotter than March’s reading.

Average gasoline prices are now hovering above $4.50 per gallon, according to AAA’s data. This time last month, AAA put the average at $4.13.

The surge in fuel costs is also trickling into airfares, which were up 2.8% from March and 20.7% from last year.

Food costs continued to bite, rising 3.2% from a year ago. Meat kept getting more expensive, with beef and veal prices up 2.7% from March, and the price of hot dogs soaring 5.8%.

Tomatoes surged again, rising 15.1% in a month. They’re up nearly 40% from last year.

Shelter costs, which were expected to jump in April’s report due to data distortions after last year’s government shutdown, rose 0.6% from March.

Meanwhile, a selloff in chip stocks drove stocks lower, following the report on April inflation data.

It halted a rally in equities, with the S&P 500 falling from a record. A closely watched gauge of semiconductor firms sank by over 4%. 

Renewed inflation worries sent two-year yields toward their highest since June. Money markets continued to price in about 70% of a Federal Reserve hike by April 2027. US crude topped $101.