US Inflation Jumps to 3.3%
Consumer prices in the United States climbed sharply in March, driven by a historic surge in gasoline costs triggered by the ongoing conflict in the Middle East, according to government data released Wednesday.
The US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose 3.3 percent year-on-year in March, a significant acceleration from the 2.4 percent recorded a month earlier.
The agency noted that gasoline prices jumped by 21.2 percent between February and March, describing it as “the largest monthly increase since the government began publishing a related index in 1967.”
Excluding volatile energy and food prices, core inflation rose 2.6 percent compared to 2.5 percent in the previous month. The figures aligned with market expectations, according to the consensus published by MarketWatch.
The price shock follows the commencement of US and Israeli bombing campaigns against Iran on February 28. Tehran retaliated by blocking maritime traffic through the Strait of Hormuz, a critical waterway responsible for roughly one-fifth of global oil and gas deliveries.
Despite the United States being the world’s largest crude oil producer, domestic pump prices have reflected the global disruption. The average cost of a gallon of regular gasoline currently stands at $4.15, up from approximately $3.00 just before hostilities began.
Heather Long, chief economist at Navy Federal Credit Union, said inflation had climbed to its highest level in almost two years. “This is only the beginning. Food prices, travel and shipping costs are all going up in April and will exacerbate the pain,” she said.
Christopher Low of FHN Financial told Agence France-Presse that while the March CPI figure contained “no surprises,” the substantial fuel increase remained a concern. “And we got the news last night that the ceasefire is not being honored by either side, apparently,” Low added. “There’s still very little traffic through the Strait of Hormuz.”
The inflationary pressure mounts as President Donald Trump faces mid-term elections in November and has ordered peace talks with Iran. US Vice President JD Vance departed Washington for US-Iran negotiations scheduled in Pakistan this weekend, stating he hoped for a “positive” outcome.
The Trump administration, which returned to the White House in January 2025 on promises to control inflation, maintains that war-related economic disruptions will be temporary. However, Federal Reserve Chairman Jerome Powell warned during the central bank’s mid-March meeting that the conflict risked delaying efforts to bring inflation down to the two percent target—a goal unmet for five years due to successive economic shocks including the Covid-19 pandemic, the war in Ukraine, and tariff actions.