DID YOU EVEN BOTHER TO THANK HIM UPDATE: Gas Prices Lead To Biggest Monthly Inflation Spike In 4 Years

Soaring Gas Prices Lead To Biggest Monthly Inflation Spike In 4 Years In March

The gas price shock has shifted inflation's trajectory, from a slow, gradual decline to a sharp increase further away from the Fed’s 2% target.
Christopher Rugaber
AP logo
Apr 10, 2026, 08:47 AM EDT
|Updated an hour ago

WASHINGTON (AP) — The largest monthly jump in gas prices in six decades caused a sharp spike in inflation in March, creating major challenges for the inflation-fighters at the Federal Reserve and heightening the political challenges of rising costs for the White House.

Consumer prices rose 3.3% in March from a year earlier, the Labor Department said Friday, up sharply from just 2.4% in February and the biggest yearly increase since May 2024. On a monthly basis, prices rose 0.9% in March from February, the largest such increase in nearly four years.

Excluding the volatile food and energy categories, core prices rose 2.6% in March from a year earlier, up from 2.5% in February. But last month core prices rose a modest 0.2%, suggesting that rising gas prices haven’t yet spread to many other categories.

The gas price shock stemming from the Iran war has shifted inflation’s trajectory, from a slow, gradual decline to a sharp increase further away from the Fed’s 2% target. As a result, the central bank will almost certainly postpone any cut in interest rates for months and many Fed officials have said a rate hike may be needed if inflation doesn’t cool. Gas prices are also a highly visible cost that has outsize impacts on consumer confidence and political sentiment.