US inflation jumps to highest level in almost two years

A surge in prices at the pump due to the Iran war has pushed the inflation rate to 3.3%.

A spike in gasoline prices triggered by the war with Iran contributed to inflation reaching its highest level in nearly two years.

Economists are expecting a jump in inflation when this month’s Consumer Price Index report lands on Friday — possibly the biggest spike in two years, driven by soaring gas prices amid the Iran war.

The war on inflation could be in for a major setback due to the Iran war, with the Consumer Price Index expected to show March prices rose at a 3.3% annual pace, marking the highest inflation rate since May 2024.

In March 2026, U.S. inflation surged sharply due to the economic impact of the ongoing Iran war. The Consumer Price Index (CPI) rose by 0.9% month-over-month, marking the highest monthly increase since 2022. On an annual basis, inflation hit 3.3%, its highest point since May 2024, up from 2.4% in February. The surge was primarily driven by a staggering 21% spike in gasoline prices—the largest monthly increase recorded since 1967.

The Bureau of Labor Statistics released inflation data for March showing an annual rate of 3.3%, up 0.9% in just one month. Economists attribute this spike primarily to the ongoing war in Iran, which has led to significant disruptions in the Strait of Hormuz, a critical chokepoint for global oil supply. This disruption has resulted in a record 21.2% increase in gas prices from February to March, contributing substantially to the overall inflation rate.

Inflation in the US accelerated last month to its highest rate in nearly two years, as higher 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 one of the biggest monthly changes since 2022, when the world was dealing with an energy shock brought on by Russia’s invasion of Ukraine.

Soaring gas prices are expected to produce a spike in inflation when the government reports consumer prices for March on Friday, likely unnerving the inflation fighters at the Federal Reserve and heightening the political challenges of rising costs for the White House. Economists estimate that inflation rose to 3.4% in March compared with a year ago, a sharp increase from February's 2.4% rise. On a monthly basis, prices are forecast to have risen 0.9% in March from the previous month, according to a survey of economists by data provider FactSet. That would be the largest monthly increase since 2022.

Surging energy prices triggered by the war with Iran pushed annual inflation in March to its highest level in nearly two years, the U.S. Bureau of Labor Statistics reported Friday. The Consumer Price Index rose 0.9% on a monthly basis—the biggest monthly jump since 2022—and 3.3% on an annual basis, with energy costs leading the way. Gasoline prices spiked 21.2% and fuel oil prices rose 31% from February to March as the closure of the Strait of Hormuz and worries about the destruction of energy infrastructure throughout the Persian Gulf sent global oil prices sharply higher.

The consequences of the war in Iran are unavoidable. Inflation is resurging as missiles fall on Tehran, and the specter of a new price crisis is rekindling fears among central banks. Inflation climbed to 3.3% in March in the United States—the highest level since April 2024, during the comedown from the price surge triggered by Russia’s invasion of Ukraine—according to the Bureau of Labor Statistics (BLS), which compiles these figures. The spike in prices was fueled by rising energy costs. The index for energy increased 10.9 percent in March, the largest monthly increase in the index since September 2005. The gasoline index increased 21.2 percent over the month, the largest monthly increase since the series was first published in 1967.

The U.S. war with Iran and the resulting spike in energy prices have pushed inflation to its highest level in nearly two years. A report from the Labor Department Friday showed consumer prices in March were up 3.3% from a year ago. That's the biggest annual increase since May of 2024. Prices jumped 0.9% between February and March, with higher gasoline prices accounting for nearly three-quarters of that increase. Gas prices have jumped by more than a dollar a gallon, on average, since the U.S. and Israel launched their attack on Iran. Pump prices have remained high this week, despite a tentative ceasefire.

A war-driven jump in gas prices helped push US inflation to 3.3% in March, marking the fastest annual pace in nearly two years, new Bureau of Labor Statistics data showed Friday. On a monthly basis, prices rose 0.9%, triple the 0.3% pace seen in February, when inflation was 2.4%, the latest Consumer Price Index data showed. Gasoline prices, which rose a record 21.2% during the month, accounted for nearly three-quarters of the overall monthly increase. Economists had expected prices to jump 0.9% from the month before and for the annual rate to climb to 3.4%, according to FactSet.

Even as peace talks continue, threats continue to flow between the US and Iran. American officials who once expected a swift end to the war are now sitting across the table from their Iranian counterparts as the economic cost of the war begins to mount. The US has spent millions of dollars on military operations, and the economy has begun to show warning signs in retail inflation, particularly in energy. Retail inflation in the US jumped to a near two-year high of 3.3 percent in March 2026.

A global energy shock triggered by the Iran war sent U.S. inflation soaring in March, with the Consumer Price Index rising at a 3.3% annual rate, the highest reading in nearly two years. Economists had predicted inflation would jump nearly an entire percentage point from 2.4% in February to 3.3% in March on an annual basis, according to the average of six separate forecasts reviewed by CBS News. The last time inflation was this high was in May 2024.

In April 2026, the U.S. reported a significant increase in inflation, with a 0.9 percentage point jump in March, reaching 3.3% year-on-year—the sharpest monthly rise since mid-2022. This surge is mainly attributed to energy price hikes caused by the conflict in Iran and the six-week closure of the Strait of Hormuz, a vital route for global oil and gas trade. The reduction in oil supply pushed crude prices to $100 per barrel, inflating fuel, heating oil, and jet fuel costs. Despite being the world’s largest oil producer, the U.S. economy has not been spared, with average gas prices rising to $4.16 per gallon and heating oil increasing by 30%.