Consumer prices jumped in March due to a big increase in gasoline prices alongside President Trump’s war on Iran.
The Bureau of Labor Statistics said Friday the Consumer Price Index rose at an annual rate of 3.3% in March, compared with 2.4% in February.
The inflation reading is above the Federal Reserve’s target rate of 2%. However, the number aligned with Wall Street expectations.
The energy index rose nearly 11% in March, including a 21% increase in the gasoline index, “which accounted for nearly three quarters of the monthly all items increase,” the bureau said.
The average price of a gallon of gasoline rose to more than $4 in recent days, up from just below $3 at the Feb. 28 start of the U.S.-Israeli joint military operation against Iran, when oil prices began to climb.
Mr. Trump is navigating a complex economic picture ahead of the midterm elections.
Tehran retaliated by striking oil-rich Gulf states and tightening control of the Strait of Hormuz, a critical artery for 20% of the world’s oil shipments.
However, gas prices eased by 1 cent on Friday to $4.15, down from $4.16, as oil prices stabilized amid a two-week ceasefire in the Middle East.
Even if the ceasefire in the Middle East holds, it may take weeks for gas prices to come down.
The increase in the energy index in March was the highest jump since September 2005. The index for shelter rose slightly, and food prices remained relatively unchanged, the report said.
“Donald Trump’s promise to lower costs on day one was a shameless lie,” said Rep. Brendan Boyle of Pennsylvania, the top-ranking Democrat on the House Budget Committee. “Nearly 450 days into his disastrous presidency, prices have only climbed higher, and today’s report makes clear that inflation is skyrocketing because of Trump’s failed economic agenda and his reckless war with Iran.”
The Democratic National Committee said Mr. Trump is using Americans’ “hard-earned dollars to fund his war” and that annual inflation is higher than the 3% reading when the president took office in January 2025.
The White House said the economy remained on a solid footing due to Mr. Trump’s agenda of tax cuts, deregulation and domestic energy production.
“President Trump has always been clear about short-term disruptions as a result of Operation Epic Fury, disruptions that the administration has been diligently working to mitigate,” White House spokesman Kush Desai said on X. “Although gas and energy prices are seeing volatility, prices of eggs, beef, prescription drugs, dairy, and other household essentials are falling or remain stable thanks to President Trump’s policies.”
The March inflation report is unlikely to change the outlook for the Fed, which will consider whether to change interest rates in late April.
Central bankers knew the war might lift energy prices, and they are expected to hold rates steady at their meeting.
