For the first time in three years, Americans’ wages are no longer outpacing inflation.
Prices rose 0.6% on a monthly basis, driving the annual rate to 3.8%, the highest since May 2023, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics.
Economists had expected prices to rise 0.6% from March and for the annual rate to climb to 3.7%.
Prior to the late-February US-Israeli strikes on Iran, inflation had eased to 2.4%. It leaped higher in March, and now, the energy price shock from the Iran war is further compounding longstanding affordability concerns for Americans weighed down by years of fast-rising prices.
“For consumers, that means the cost of living remains uncomfortable,” economist Sung Won Sohn, a finance and economics professor at Loyola Marymount University, wrote in a note Tuesday. “For the Federal Reserve, it means rate cuts are likely to be pushed in the future.”
