Searing U.S. energy prices are driving the hottest inflation in years
Summary
Higher energy prices caused by the conflict in Iran are pushing up inflation in the United States. In April, energy costs rose nearly 18% from last year, making inflation the fastest in almost three years and outpacing wage growth for many workers.Key Facts
- Inflation grew at an annual rate of 3.8% in April, the fastest rise in nearly three years.
- Gasoline prices rose over 28% compared to a year ago, averaging $4.50 per gallon nationwide.
- Overall energy costs, including gas, heating oil, and electricity, increased nearly 18% from last year.
- The Iran war is estimated to have added about $22 billion to Americans’ fuel costs since March 1.
- Electricity prices rose 6.1% in April, partly due to higher energy needs from growing data centers for AI technology.
- Airfares increased nearly 21% compared to last year because of higher jet fuel costs.
- Diesel fuel prices are near record highs, which may increase costs for food and other goods dependent on transportation.
- Officials expect inflation could rise above 4% if oil prices stay high but hope the supply disruption will be temporary.
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