Inflation spikes in April

Inflation spikes to 3.8% in April amid Iran shock

The annual inflation rate shot higher in April as the war in Iran drove up energy and food prices, according to data released Tuesday by the Labor Department.

The consumer price index (CPI), a popular gauge of inflation, rose 3.8 percent over the past 12 months and 0.6 percent in April alone, according to the new Labor Department data.

Economists expected the annual inflation rate to rise to 3.7 percent, according to consensus estimates, after hitting 3.3 percent in March.

Energy prices rose 3.8 percent last month alone as the war in Iran chokes off the global supply of oil through the Strait of Hormuz, drastically raising the cost of accessible crude and other products derived from it. Food prices were up 0.5 percent in April.

The latest inflation data is also a major political blow to President Trump and Republican lawmakers, who face a potential midterm election revolt over the economy as price growth accelerates because of the Iran conflict.

The 3.8 percent annual inflation rate outpaced the 3.6 percent annual increase in wages last month, according to the Labor Department, meaning prices are now rising faster than pay.

“There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains,”........

© The Hill