Consumer prices were 3.8% higher in April compared to a year earlier, underscoring the impact that sharply rising fuel prices have had on the annual inflation rate.
The data released by the U.S. Bureau of Labor Statistics on Tuesday showed energy prices were up 17.9% last month compared to April 2025. Within the energy category, gasoline prices were 28.4% higher, and fuel oil prices were 54.3% higher during the same 12-month period.
Although a cease-fire in the 10-week war with Iran took effect in April, commercial shipping of oil through the Strait of Hormuz, the world’s most critical oil choke point, remains severely disrupted and far below normal levels of 20 million barrels a day.
In other major consumer categories, food prices were 3.2% higher in April than they were in April 2025, and so-called “core inflation” – the index that includes all major categories except food and energy prices – rose 2.8% during the same 12-month period.
The all-items index increase of 3.8% for the 12 months ending in April represented an acceleration from the 3.3% inflation rate for the 12 months that ended in March.
On a monthly basis, the index for energy rose 3.8% between March and April, and it accounted for more than 40% of the monthly all-items increase. The shelter index also increased in April, rising 0.6%. The index for food increased 0.5% over the month.
The index for core inflation, which excludes food and energy prices, rose 0.4% in April. Indexes that increased over the month include household furnishings and operations, airline fares, personal care, apparel, and education. Conversely, the indexes for new vehicles, communication, and medical care were among the major indexes that decreased in April.
The stock market fell in early trading after the hotter than expected inflation report was released. The Dow Jones Industrial Average and S&P 500 were down roughly -0.6% and the Nasdaq Composite slid about -0.9%.
Overall, the 0.6% monthly increase and 3.8% annual increase in the inflation rate diminishes expectations that the Federal Reserve will lower interest rates in June. The CME FedWatch Tool says the probability is 97.6% that the Fed will leave rates unchanged at its next meeting.
