America's consumer prices jump 3.3% amid Iran conflict fallout

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File: Trump. Photo by SAUL LOEB / AFP.

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Inflation in the United States rose sharply in March, government data showed Wednesday, as higher energy prices due to the war in the Middle East hit Americans hard.

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The nationwide sticker shock put pressure on President Donald Trump, who has ordered peace talks with Iran and faces mid-term elections in November.

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The rate of inflation rose to 3.3 percent year-on-year in March, the US Bureau of Labor Statistics (BLS). By comparison, this same consumer price index (CPI) rose 2.4 percent year-on-year a month earlier.

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Gasoline prices surged by 21.2 percent between February and March — the largest monthly increase since the government began publishing a related index in 1967, the US Bureau of Labor Statistics (BLS) said.

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Excluding volatile energy and food prices, the inflation rate rose 2.6 percent compared to 2.5 a month earlier.

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Markets had anticipated the surge, according to the consensus published by MarketWatch.

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The United States and Israel began bombing Iran on February 28 and Tehran retaliated by blocking traffic in the Strait of Hormuz, a waterway used to carry a fifth of the world’s oil and gas deliveries.

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Despite being the world’s top producer of crude oil, the United States also felt the pain, as prices at the gas pump shot up.

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A gallon (3.78 liters) of regular gasoline currently costs an average of $4.15 in the United States, compared to approximately $3 just before the war.

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– More price pain ahead –

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The Trump administration — elected in part on a promise to quash inflation — maintains that the war’s economic disruptions will be temporary.

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US Vice President JD Vance said Friday he hoped for a “positive” outcome as he departed Washington for US-Iran peace talks being held in Pakistan this weekend.

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But experts predicted more economic pain ahead due to the war in Iran, especially for middle and lower-income households in the United States already squeezed by rising energy and airfare prices.

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Heather Long, chief economist at Navy Federal Credit Union, said that inflation soared in March to the highest level in almost two years.

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“This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain,” she said.

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“March CPI was as expected, so no surprises. But there is a huge increase in fuel prices, boosting inflation” Christopher Low of FHN Financial told AFP.

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“And we got the news last night that the ceasefire is not being honored by either side, apparently,” he said. “There’s still very little traffic through the Strait of Hormuz.”

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When Trump returned to the White House in January 2025, inflation was falling, compared to a peak in the spring of 2022.

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The war in Ukraine, which had started a few months earlier, had driven prices at the pump even higher than they are today.

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The CPI index was rising by 2.3 percent year-over-year in April 2025 — coinciding with the US president’s announcement of a sharp increase in tariffs on imported goods.

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Inflation started to creep up, though Washington refused to acknowledge this as a consequence of the tariff war.

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Price growth slowed again late last year, largely thanks to gasoline prices, relatively moderate at the time.

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During the Federal Reserve’s most recent meeting in mid-March, Chairman Jerome Powell explained that the war risked delaying efforts to bring inflation under control in the United States.

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The US central bank’s target for inflation is two percent — an objective it has not met in five years due to a succession of shocks to the economy: the Covid-19 pandemic, the war in Ukraine, and tariffs.

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