Meridian Equity Partners senior managing partner Jonathan Corpina analyzes how the Iran and OpenAI news has driven the market struggle in 'The Claman Countdown.'
Inflation has risen in April as consumer prices rose amid the impact of the Iran war on the energy market and the broader economy.
The Bureau of Labor Statistics on Tuesday said Consumer price index (CPI) – a broad measure of how much everyday goods such as fuel, groceries and rent cost – rose 0.6% from last month and 3.8% higher than a year ago. That is the highest level since May 2023.
Expectations versus reality
The 0.6% monthly increase was in line with the expectations of economists polled by the LSEG, while the annual figure was hotter than the forecast of 3.7%.
So-called core prices, which exclude variable rates of fuel and food to better gauge price growth trends, were up 0.4% monthly and 2.8% from a year ago. Both of those figures were above economist forecasts of 0.3% and 2.7%, respectively.
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Economists noted that inflation data from December 2025 to April 2026 will be affected by data collection occurring during the 43-day government shutdown.
During the shutdown, the BLS was unable to collect data and used a carry forward method to cover the missing October CPI report and the missing data in the November report. Economists say this is likely to transmit a downward bias in inflation data until this spring, when new data will eliminate the discrepancy.
Cost of living deterioration
High inflation has put a lot of financial pressure in recent years on many US households, who are forced to pay more for everyday necessities like food and rent. Inflation is especially hard on low-income Americans, because they tend to spend more of their already stretched paychecks on necessities and have less flexibility to save.
Energy prices rose 3.8% in April amid Iran's war on oil supply disruptions in the Middle East, with prices up 17.9% a year earlier. The BLS noted that the energy index accounted for more than 40% of the CPI increase in April.
Gasoline prices have increased significantly compared to last year due to the impact of the Iran war. (Justin Sullivan/Getty Images)
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Gasoline prices rose 5.4% in April and are up 28.4% from a year ago. Electricity prices are up 2.8% monthly and up 6.1% from last year. Consumer gas service prices fell 0.1% in April and rose 3% last year.
Food prices rose 0.5% in April and are up 3.2% from a year ago. The household consumption index increased by 0.7% monthly and increased by 2.9% from last year. Food away from home increased 0.2% in April and is 3.6% higher than a year ago.
Meat, poultry and fish prices were up 1.2% monthly and up 6.7% year-on-year. Beef and veal prices rose 2.7% in April and are 14.8% higher than a year ago. Egg prices rose 1.5% in April but fell 39.2% year-on-year as supplies normalized after an outbreak of bird flu caused shortages. The fruit and vegetable index rose 1.8% in April and is 6.1% higher than last year.
Food prices rose in April and were up 3.2% from a year ago. (Justin Sullivan/Getty Images/Getty Images)
House prices were up 0.6% in April and up 3.3% from a year ago. Renters and home insurance costs rose 0.1% month-over-month but rose 7.2% year-over-year.
Transportation service prices were up 0.3% on the month and 4.3% higher than last year. Air fares posted the biggest increase, rising 2.8% in April and up 20.7% year-on-year.
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What do the experts say?
James McCann, chief investment strategist at Edward Jones, said “America's households continue to feel the strain of rising energy costs, adding to the inflation they've experienced since the pandemic.
“The good news is that the economy looks resilient to the price shock so far. Many consumers have benefited from tax refunds this year, hiring has taken a near stagnant rate through 2025 and businesses are generating strong profit growth,” McCann said.
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Seema Shah, chief global strategist at Principal Asset Management, said the inflation data could force a rate cut by the Federal Reserve until December at the earliest, with risks mounting that it won't happen until 2027.
“While inflation is expected to rise, the underlying surprise is very important. It indicates a gradual increase in price pressure, something the Fed will not hesitate to dismiss,” explained Shah. “It is too early to conclude that a second round of volatility is underway. But with inflation rising to its highest level since 2023 and looking uncomfortably sticky, and the labor market strong and volatile, the case for policy caution has intensified.”
