Inflation reached its highest rate under President Donald Trump’s second term, ticking up 0.6% in April, for a one-year pace of 3.8%, according to data released Tuesday by the Bureau of Labor Statistics.
The 3.8% annualized rate is the highest inflation mark since May of 2023, when it came in at 4% and was on its way down from a 40-year high under former President Joe Biden. Experts expected April’s inflation report to come in at 3.7%.
Energy costs rose 3.8% in April, accounting for 40% of the monthly increase and pushing the 12-month gain to 17.9%. That marked a cooldown from March, when energy prices jumped 10.9% — the largest monthly gain since 2005. Shelter (0.6%) and food (0.5%) also posted notable increases.
Inflation in April outpaced the month’s wage gains by 0.2%. United States equities fell by 0.7% after the inflation report was released. The Nasdaq also dropped 1.2%, and the Dow Jones Industrial Average fell by 0.6%.
“It isn’t like it’s an avalanche, but it’s a steady move upward,” Thomas Martin, the senior portfolio manager at Globalt Investments, told CNBC.
Rising prices have hit Americans the hardest at the pump in recent months as the national average price for gas has ticked up to $4.50 per gallon.
The White House appeared to respond to the inflation report by sharing a chart showing goods and services that have fallen over the last year. Oil was notably not on the list.
— Rapid Response 47 (@RapidResponse47) May 12, 2026
White House spokesman Kush Desai told The New York Times that the administration “remains laser-focused on delivering growth and affordability on the home front while working to eliminate the Iranian nuclear threat.” Data shows the price uptick is driven by higher energy prices due to the war with Iran.
The Strait of Hormuz, the chokepoint for roughly one-fifth of the world’s oil supply, remains closed. On Monday, President Trump said that a proposed deal to end the conflict with Iran is on “life-support.”
April’s inflation report sparked speculation of a potential rate cut before the end of 2026. Kevin Warsh is expected to take the reins from Fed Chair Jerome Powell on Wednesday.
