U.S. consumer prices increased by 3.3% last month when compared to the same period last year, meeting market forecasts. This rise is due to rising global oil prices after the conflict broke out between the U.S., Israel, and Iran, which pushed overall inflation up.
On the 10th, the U.S. Department of Labor revealed that the consumer price index (CPI) rose by 3.3% compared to the previous year and 0.9% from the prior month. The monthly increase represented the biggest jump since June 2022, while the annual rate was the highest since May 2024. In terms of categories, energy costs surged by 10.9%, with gasoline prices climbing 21.2%, driving up the overall index. The Washington Post stated, “The tension with Iran has caused significant price hikes not only for crude oil but also for refined petroleum products such as gasoline and diesel, creating widespread effects that impact fertilizers and other goods reliant on fossil fuels for manufacturing or transport.”
Nevertheless, the core CPI, which excludes fluctuating energy and food costs, increased by 2.6% compared to the previous year and 0.2% from the prior month, both slightly under predictions (2.7% and 0.3% respectively). This moderate consistency in the core CPI was influenced by housing expenses—a significant factor—rising just 0.3% and pre-owned vehicle prices declining by 0.4%.
American media sources have suggested that even if peace talks between the U.S. and Iran are successfully concluded, maintaining short-term stability in inflation patterns will still be difficult.
Joe Brusuelas, the chief economist at the U.S. accounting firm RSM, predicted, “Even if a ceasefire is reached, the impact of oil and energy price fluctuations will continue to influence consumers in multiple ways throughout this year.” David Russell, the global head of market strategy at the U.S. online brokerage TradeStation, also commented, “With slow economic data like income and GDP coinciding with the geopolitical tensions originating from Iran, the chance of a stagflation similar to the 1970s is increasing.”
On the other hand, Jeff Buchbinder, chief strategist at U.S. LPL Financial, expressed a positive perspective, saying, “After the geopolitical uncertainty lifts, stock markets are expected to regain significant upward movement due to the market’s strong underlying fundamentals.”
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