US inflation jumps to 3.8% as Iran war drives energy costs

US consumer prices rose 3.8% year-over-year in April 2025, driven by a 10-week war with Iran that pushed energy prices higher, according to Labor Department data released Tuesday. Month-over-month, prices increased 0.6% from March, with petrol up 5.4%. Petrol prices are up over 28% compared to a year ago, and AAA listed the average regular gallon above $4.50, about 44% more than last year. Excluding volatile food and energy, core prices rose 0.4% monthly and 2.8% annually, suggesting limited spillover. Grocery prices rose 0.7% from March to April, led by meat. Heather Long, chief economist at Navy Federal Credit Union, noted inflation is now eating up all wage gains for the first time in three years, squeezing middle-class and lower-income households.