From the Wall Street Journal;
U.S. ECONOMY
Inflation Soared to 3.8% in April, Driven by Gasoline Prices
The figures, reported Tuesday by the Labor Department, surpassed the previous month’s reported increase of 3.3%.
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Consumer prices rose 3.8% in April from a year earlier, a clear impact of higher gas prices since the start of the war with Iran.
The figures, reported Tuesday by the Labor Department, surpassed the previous month’s reported increase of 3.3%. Economists polled by The Wall Street Journal had expected inflation of 3.7%.
The context
Higher energy prices due to the Iran war could filter through to many other goods in the coming months. For example, higher gas prices are pushing up the cost of transportation, which might in turn make food and clothing more expensive.
A rise in natural-gas prices has already pushed up fertilizer costs, another reason food prices might rise. Lots of products, from lipstick to golf balls, could also be exposed to the turmoil in the Middle East since their production processes use oil derivatives.
Economists worry that rising inflation will further eat into workers’ weekly earnings, resulting in lower demand for goods and services.
Trump responds to high prices
In response to the ripple effects of the war, President Trump said Monday that he supports suspending the federal gasoline tax. The average nationwide cost of one gallon of regular unleaded gasoline is roughly $4.50, compared with $3.14 a year ago, according to AAA.
The Trump administration had planned to temporarily reduce tariffs on beef imports, in an effort to bring down prices, The Wall Street Journal reported on Monday. Later that day, after an outcry from some congressional Republicans and cattle ranchers, the Trump administration said it would delay that plan.
Consumer sentiment hit a record low in April, largely due to soaring prices at the pump.
Promotional photo by David Ryder/Bloomberg News.
Write to Chao Deng at
chao.deng@wsj.com
