US Inflation Accelerates for Second Straight Month as Gas Costs Drive April CPI

Gasoline Prices Push U.S. CPI to 3.8% in April, Highest Reading Since Late 2025

The monthly CPI-U rose 0.6% on a seasonally adjusted basis in April, following a 0.9% increase the prior month. The all-items index reached 333.020 on the 1982-84 base scale, up 0.9% from March on an unadjusted basis.

Core inflation, which strips out food and energy, came in at 2.8% year-over-year, up from 2.6% in March. Month-over-month, core CPI rose 0.4%, edging past the 0.3% expectation.

Energy prices led the acceleration. The energy index climbed 17.9% over the past 12 months and added 3.8% in April alone on a seasonally adjusted basis, accounting for more than 40% of the total monthly increase. Gasoline prices rose 28.4% year-over-year, and fuel oil jumped 54.3% over the same period. BLS data and analyst commentary point to the ongoing U.S.-Iran conflict and oil supply disruptions as the primary drivers.

Food prices increased 0.5% month-over-month and 3.2% year-over-year. Food at home rose 2.9% annually, while food away from home climbed 3.6%. Meats, poultry, fish, and eggs moved up 1.3% in April. Fruits and vegetables gained 1.8% for the month.

Shelter costs increased 0.6% in April and are up 3.3% year-over-year, continuing to press on core inflation. Transportation services are running 4.3% above year-ago levels, and medical care services rose 3.2% annually.

Household furnishings, airline fares, apparel, and education also contributed to core inflation in April. Declines in new vehicles, communication, and medical care services provided partial offsets.

April marks the second consecutive month of headline inflation acceleration. Inflation had been tracking as low as 2.4% year-over-year in February 2026 before reversing course. The current reading is the highest since late 2025.

Federal Reserve policymakers are now contending with a hotter-than-expected print on both headline and core measures. Analysts say the April data reduces the probability of a near-term rate cut, with the first reduction now more likely to fall in late 2026 or into 2027. The Fed’s 2% inflation target remains out of reach under current projections.

Gasoline prices approaching or exceeding $4 per gallon in many parts of the country are pressuring household budgets and pulling back discretionary spending. Early market reactions included a stronger U.S. dollar, downward pressure on equities and bonds, and heightened volatility expectations.

Shelter and services inflation remain sticky even as energy drives the headline number. Food prices are still elevated despite some moderation. Analysts note that without a cooling in energy prices, headline inflation has little room to retreat.

The next CPI release, covering May 2026 data, is scheduled for mid-June.