Inflation jumped again in April, largely in part due to high gas prices amid the Iran war.
The consumer price index (CPI) increased 0.6% on a seasonally adjusted basis in April, after rising 0.9% in March, and rose 3.8% year-over-year, the U.S. Bureau of Labor Statistics (BLS) reported May 12. That’s well above last month’s annual inflation figure of 3.3% and the highest annual rate since 2023.
Gas prices fueled much of the rise. The index for energy rose 3.8% in April, accounting for more than 40% of the monthly all items increase, the BLS reported. The shelter index also increased in April, rising 0.6%. The index for food increased 0.5% over the month as the index for food at home rose 0.7% and the index for food away from home increased 0.2%. The cost of household furnishings and operations, airline fares, personal care, apparel, and education also rose over the month.
Core inflation, which excludes volatile food and energy prices, rose 2.8% over the year, following a 2.6% increase over the 12 months ending March.
In addition to gas prices, other factors likely contributing to higher inflation are the sustained impact of tariffs and higher import costs, as well as elevated health care costs.
The inflation report is the latest indicator that high everyday costs are a pain point for workers, and could put pressure on employers to find ways to support employees through financial benefits, commuter perks, and other assistance.
Persistent high costs and broader economic uncertainty have pushed employee financial confidence to its lowest level in 14 years, according to recent MetLife data.
Gas prices are adding to that burden. The average price of regular gasoline has surpassed $4.50 per gallon, increasing costs for workers who commute regularly. “Rising fuel costs are especially significant, as they directly impact transportation and logistics, which ultimately drives higher prices across a wide range of products and services,” said Andrea Medici, labor economist at SHRM.
Adding to financial pressures for employees, real average hourly earnings for all employees decreased 0.5% from March to April, seasonally adjusted, the BLS reported May 12. This result stems from an increase of 0.2% in average hourly earnings combined with an increase of 0.6% in the CPI.
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