U.S. April Inflation Rises to 3.8% YoY, Fastest in 3 Years

Inflation in the United States accelerated in April to its fastest annual pace in nearly three years, according to a report from the Commerce Department, placing additional strain on household budgets and narrowing the path for Federal Reserve interest rate cuts. The Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, rose 3.8 percent over the year ending in April, up from 3.5 percent in March and marking the highest reading since May 2023.

On a monthly basis, prices rose 0.4 percent, a slowdown from the 0.7 percent jump seen in March. A core measure of inflation, which excludes volatile food and energy prices, climbed to 3.3 percent annually, up from 3.2 percent the previous month. Both figures remain well above the central bank's 2 percent target.

Officials and economists point to higher energy costs linked to an ongoing conflict in the Middle East as a primary driver of the increase. The conflict has disrupted shipping in the Strait of Hormuz, boosting energy prices and straining global supply chains. The national average retail gasoline price surged 12.3 percent in April alone and has risen more than 50 percent since the conflict began in late...