Inflation in the US accelerated last month to its highest rate in nearly two years, as surging oil prices triggered by the US-Israel war in Iran started to spill over into the wider economy.
Consumer prices climbed 3.3% over the 12 months to March, picking up from 2.4% in February, the Labor Department said.
The jump, which was expected, marked the biggest monthly change since 2022, when the world was dealing with an energy shock brought on by Russia’s invasion of Ukraine.
Last month’s increase was driven by a surge in prices at the pump, as the war’s shutdown of the Strait of Hormuz sent oil prices soaring.
Gas prices rose 21.2% from February to March – the biggest monthly increase since the government started tracking the figures in 1967. Prices for fuel oil jumped more than 30% in the biggest surge since February 2000.
The impact has been particularly visible in states such as California, where gas prices were already higher than the rest of the US.
On Thursday, the average cost of a gallon of gas in California was $5.93, compared to the nationwide average of $4.16, according to the American Automobile Association.
Annel Villegas, 23, said the cost was “terrible”, using an expletive for emphasis.
“I drive a truck, so I fill it up every half tank, and now it’s like, $70 (£52), $80,” she said, adding that she had tried to limit her driving as much as possible due to the jump in gas prices.
Still, she said: “I have to do what I have to do to live …. I’m just dealing with whatever it brings to me – so, paying more.”
The spike in gas prices accounted for nearly three quarters of the rise in inflation from February to March.
Prices for airline tickets and clothing also increased over the month, reflecting a mix of higher energy prices and the lingering impact of tariffs, as firms continue to pass those costs onto customers.
Food prices were unchanged from February to March, but analysts said those may rise in the months ahead, as the impact of higher transportation and fertiliser costs starts to be felt.