The White House on Friday received its worst inflation report of President Donald Trump’s second term, as the war in Iran sent consumer prices surging at the fastest monthly pace in four years.

Consumer prices rose 0.9 percent in March from the month before, the Bureau of Labor Statistics reported, the biggest monthly gain since 2022. On an annual basis, prices climbed 3.3 percent, up sharply from 2.4 percent in February. Energy prices drove much of the increase, jumping roughly 11 percent — the largest monthly gain in more than two decades — with gasoline prices posting the biggest single-month spike in the history of the index.

White House economic adviser Kevin Hassett said the price increases will be temporary because they were confined to energy and didn’t spill over into other goods. He noted declines in other categories such as eggs, beef and sports tickets.

But the critical oil chokepoint remains squeezed — only four tankers crossed on Thursday, according to ship-tracking company Kpler. And the backup takes time to ripple through the supply chain, from crude oil to refined products such as diesel and gasoline, eventually to all the consumer products those fuels help produce and transport.

Financial markets were mixed. The Dow Jones Industrial Average and the S&P 500 fell while the Nasdaq composite index edged higher.

Consumer sentiment was already deteriorating before Friday’s report. The University of Michigan’s preliminary April reading showed confidence plunging 11 percent from March, with every demographic group posting declines. Year-ahead inflation expectations surged to 4.8 percent, the largest one-month jump since last April. Notably, 98 percent of interviews were completed before the ceasefire announcement, suggesting the final reading could look somewhat better.

The conflict in Iran has fueled a rapid rise in the cost of oil and refined petroleum products, including gasoline and diesel, an expected outcome of the conflict that nonetheless intensifies pressure on an administration that has made tackling high prices a central political promise.

There are encouraging signs the report isn’t a harbinger of lasting inflation. The surge in overall prices masked a more optimistic signal underneath: so-called core inflation — which strips out volatile food and energy prices — held relatively steady, rising just 0.2 percent last month, or 2.6 percent on an annual basis.

Even so, some economists cautioned that relief is unlikely to reach consumers quickly, even if the ceasefire announced this week holds. Negotiations in Pakistan are expected to begin Saturday with Vice President JD Vance leading the U.S. delegation.

“Even if the negotiators in Pakistan stick the landing and the ceasefire turns into a durable period of non-conflict, the lagged impact of the oil and energy shock will impact consumers in a variety of ways through the remainder of 2026,” said Joe Brusuelas, chief economist at RSM.

The March report arrives as inflation completes five consecutive years above the Federal Reserve's 2 percent target — and as hopes of a final push back to normal appear to be fading. After cooling markedly from its 2022 peak, price growth had appeared to stall out at around 3 percent, about one percentage point above where the Fed wants it, even before the Iran conflict added fresh fuel. (Source: The Washington Post)

Story Date: April 12, 2026