April CPI rose 3.8% year-over-year, the highest since May 2023, with energy and food driving gains and real wages declining.
US consumer prices climbed 3.8% year-over-year in April, accelerating from 2.4% in January and February, marking the highest reading since May 2023. The increase was driven by a 3.8% monthly rise in energy prices, which accounted for over 40% of the headline CPI gain, alongside a 0.5% increase in food costs.
The data suggests inflation’s pre-pandemic ceiling of 3% may now act as a floor, though economists note this does not signal a 1970s-style spiral. Gasoline prices surged 28.4% from a year earlier, while grocery prices rose 0.7% on the month.
Real average hourly earnings fell 0.3% year-over-year, highlighting a disconnect between wage growth and inflation. Economists warn that wage gains have disproportionately benefited higher-income households, leaving middle- and lower-income workers facing persistent pressure.