WASHINGTON — U.S. consumer prices rose sharply in March as energy costs surged amid the recent escalation involving the United States, Israel and Iran, the Bureau of Labor Statistics reported on Friday.
The Consumer Price Index increased 0.9 percent from February, the largest monthly gain since June 2022, and climbed 3.3 percent over the 12 months ending in March, up from 2.4 percent in February, according to the Labor Department.
The rise was driven primarily by energy prices, which jumped 10.9 percent in the month, led by a 21.2 percent increase in gasoline, the agency said. Energy costs accounted for nearly three-quarters of the overall monthly CPI increase. Core prices, which exclude volatile food and energy, rose 0.2 percent in March and 2.6 percent over the year.
The data mark the first official reading to reflect the economic effects of the conflict, which disrupted oil flows through the Strait of Hormuz — a key chokepoint for roughly one-fifth of global oil trade — before a ceasefire took hold. The escalation followed tensions that affected shipping and energy supplies in the region.
Economists had widely anticipated the jump, with forecasts centering on a 0.9 percent monthly increase and about 3.3 percent annually. The figures aligned closely with those expectations, according to reports from Reuters and other outlets.
Federal Reserve officials monitor inflation data closely as they weigh monetary policy. The report comes as high-level ceasefire talks between U.S. and Iranian officials opened Saturday in Islamabad, Pakistan, mediated by Pakistani authorities. U.S. Vice President JD Vance is leading the American delegation.
White House officials have not issued immediate detailed comments on the CPI release beyond noting the data. Some analysts have pointed to the temporary nature of the energy shock, while others cautioned that any breakdown in the truce could sustain pressure on prices.
As of Saturday, the April CPI report is scheduled for release on May 12. Details on the full breakdown of other categories, including shelter and food, remained consistent with recent trends in initial summaries, though specific subcomponent figures beyond energy were not uniformly highlighted across reporting. Outcomes from the ongoing Islamabad negotiations remained unclear.
