STORY: A closely watched inflation report on Friday showed that U.S. consumer prices in March rose by the most in nearly four years as the war with Iran led to a record surge in gasoline prices.
The Bureau of Labor Statistics' Consumer Price Index jumped 0.9% last month, the largest increase since June 2022, when prices soared in response to the Russia-Ukraine war.
March's increase was in line with economists' expectations, but marked a significant leap from February's 0.3% rise.
:: 3.3%
It also put the annual inflation rate at 3.3%, nearly a full percentage point higher than February's year-over-year gain.
Fueling the price surge: A record 21.2% jump in gasoline prices, which accounted for nearly three quarters of the CPI increase.
"It's quite significant."
Stephen Kates is a financial analyst with Bankrate.
"When we look at gas prices in particular, this is where things really stand out. AS a percentage change over a single month, this is the largest since this data was tracked back in 1967."
The so-called core CPI, however - which strips out volatile food and energy prices - rose a modest 0.2% in March, after advancing the same amount in February.
:: 2.6%
That put the annual core inflation rate at 2.6%.
Still, economists expect the Middle East war to lift core prices in the months ahead, as expensive jet fuel will likely raise airline fares, and diesel will increase the cost of goods transported by road. Prices of fertilizer and plastics, among other goods, are also expected to rise.
:: File
Elevated inflation has led some economists to predict that the Federal Reserve will not lower interest rates this year, a belief that was reinforced this week by the release of minutes from the central bank's March policy meeting, which showed a growing group of policymakers felt that rate hikes might be needed instead.
