Annual Consumer Inflation Hits Highest in Nearly 3 Years as Energy Costs Soar

10:57 AM EDT, 05/12/2026 (MT Newswires) -- US annual consumer inflation accelerated in April to the fastest pace in almost three years as energy prices surged amid the near-complete closure of the Strait of Hormuz.

The consumer price index accelerated to 3.8% year over year in April -- the highest print since May 2023, the Bureau of Labor Statistics reported Tuesday. The print exceeded Wall Street's 3.7% forecast. Prices rose 3.3% in March.

Energy prices rose nearly 18% annually, the highest since September 2022, official data showed. The food index climbed 3.2%.

"Inflationary pressures heated up in April, as elevated crude oil prices continued to push gas prices higher and lead to some spillover price effects across other categories like food and airfares," Thomas Feltmate, senior economist at TD Economics, said in a report. "That said, some of the uptick in core inflation looks overdone."

West Texas Intermediate crude has jumped more than 50% since the US and Israel started a war with Iran at the end of February. That conflict has disrupted shipments through the Strait of Hormuz.

US retail gasoline prices averaged $4.504 per gallon Tuesday, compared with $3.137 a year ago, according to data from AAA, a travel organization that tracks fuel prices in the country.

Monthly inflation slowed to 0.6% in April from 0.9% in March, the BLS reported. The latest reading matched a Bloomberg-polled consensus view. Energy price growth eased to 3.8% sequentially from nearly 11%.

US President Donald Trump recently rejected Iran's counteroffer to end the war, extending uncertainty around oil flows through the crucial Strait of Hormuz.

Energy market volatility remains elevated amid "headlines around escalation, ceasefire discussions, and maritime security in the Strait of Hormuz," TD Economist Marc Ercolao said in separate report.

Core inflation, which excludes the volatile food and energy components, accelerated to 2.8% annually in April -- the fastest since September -- from March's 2.6% print. Wall Street expected a print of 2.7%.

Core prices rose 0.4% month over month after a 0.2% rise in March, ahead of the Street's expectation for a 0.3% level.

"This morning's numbers reinforce why the (Federal Reserve) needs to remain patient," TD's Feltmate said. "With secondary price effects from higher energy prices likely to intensify in the months ahead, we're likely to see core measures of inflation drift a bit higher and hover around 3% through year-end."

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