US inflation surges to three-year high amid tensions with Iran

Heightened petrol prices led the inflationary pressures with prices that have jumped 5.5 percent in AprilUnited States inflation jumped at its fastest pace in three years as the ongoing Israel-war-on-Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran fuelled higher energy prices.Personal Consumption Expenditures — the US Federal Reserve’s preferred measure for assessing inflation — rose by 3.8 percent over the last year in April, following a 3.5 percent increase in March, according to the Department of Commerce’s Bureau of Economic Analysis report released on Thursday.Recommended Stories list of 4 itemslist 1 of 4Google employee charged with insider trading over Polymarket betslist 2 of 4Palestinian graduates in the West Bank enter a collapsed job marketlist 3 of 4Morocco tops Africa’s industrialisation index for first timelist 4 of 4China’s secret weapon in AI race with US? Lots of cheap energyend of listOn a month-over-month basis, the PCE (Personal Consumption Expenditures Price Index) rose by 0.4 percent in April following a 0.7 percent increase in March.Overall, goods prices ticked up by 0.7 percent. The biggest jump was at petrol pumps, with prices rising 5.5 percent as tensions with Iran strained global energy markets. The average price for a gallon of petrol (3.78 litres) is $4.42, up from $4.17 this time last month, and up from $2.98 per gallon on February 28, when the US and Israel struck Iran.Food prices also rose by 0.5 percent, marking the largest monthly price increase since November 2022.Housing and utility costs jumped by 0.6 percent as well. Consumer spending also increased by 0.5 percent following a 1 percent increase in March. More consumers are also tapping into their savings, with the savings rate falling by 2.6 percent last month.Federal Reserve pressuresThe rising inflation puts pressure on the Federal Reserve ahead of the central bank’s first policy meeting under new Chair Kevin Warsh, which is slated for June 16-17. The central bank tracks PCE inflation as it tries to reach its 2 percent target.