Inflation in the US reaches highest level in over three years

Inflation surged once again in the United States, reaching the highest level in April in over three years, according to data released on Tuesday. This reflected the increase in gas prices as well as higher food costs.

At 3.8%, the Consumer Price Index (CPI) recorded its highest year-over-year pace in April since May 2023.

In March, it had increased by 3.3%, following 2.4% in February.

This development puts pressure on the government of Donald Trump as the mid-term elections approach in November.

During the 2024 election campaign, Mr. Trump had promised to lower prices and create a new “golden age” for Americans.

The White House, known for quick responses to positive economic data, remained silent on the subject following the release of the index on Tuesday.

The administration has been repeating for weeks that the disruptions related to the war it initiated in the Middle East are temporary. It describes them as the price to pay to prevent Iran from ever acquiring nuclear weapons.

In the data released on Tuesday, gas weighs heavily with a 28.4% surge in fuel prices year-over-year. But price increases are also widespread in the rest of the economy, from rents to airplane tickets.

After a pause in March, food prices rebounded in April (+2.9% year-over-year, +0.7% month-over-month).

This increase “seems to be related to energy,” with producers passing on the costs they face, according to Samuel Tombs, an analyst at Pantheon Macroeconomics, in a note.

In the land of burgers, beef is among the products causing consumer alarm.

In April, one had to pay 16.1% more than a year earlier for a beef steak. The increase was 14.5% for ground beef.

Signs of relief are rare, for example, among dealers (-2.7% year-over-year for used vehicles).

Opposition blames Trump

“For the first time in three years, inflation is outpacing wage increases. This is a blow to middle and working class households,” noted Heather Long, an economist at Navy Federal Credit Union.

Democratic Senator Elizabeth Warren pointed out that President Trump’s personal decisions are directly responsible for the current inflation, as he imposes tariffs on imports and waged war against Iran on February 28 instead of Israel.

In gas stations, the impact of the war in the Middle East continued to be felt in May.

A gallon of regular gasoline currently costs an average of 4.50 dollars, compared to about 3 dollars just before the conflict began, according to the American Automobile Association (AAA).

Diesel, used in trucks and tractors, is nearing the record reached in June 2022 at 5.82 dollars, a few months after Russia’s invasion of Ukraine.

The issue, noted economist Diane Swonk of KPMG, is that “the rise in gas prices adds to other energy costs from before the war in Iran.” She pointed out the unpopular increase in electricity (+6.1%), attributed to high demand from data centers, “a major issue in the November elections.”