US inflation hits highest level in 3 years

What happened

Consumer prices last month shot up 3.8% from a year earlier, the biggest year-over-year uptick since May 2023, the U.S. Labor Department reported Tuesday. The heated inflation was driven largely by a 28% year-over-year jump in gasoline prices tied to President Donald Trump’s war with Iran.

Who said what

The latest consumer price index underscored how “daily life in America is getting more expensive,” The New York Times said. Airfares were up 21% from a year ago and food prices rose 3.2%, with coffee prices jumping 19% and tomatoes up 40%. Trump’s tariffs are “still slowly filtering through to some goods,” The Wall Street Journal said, but the war “has presented a much quicker and more obvious shock that could be hard to reverse.”

Asked Tuesday if cost-of-living concerns were motivating his dealmaking with Iran, Trump said “not even a little bit.” His only concern is Iran’s nuclear program, he said. “I don’t think about Americans’ financial situation. I don’t think about anybody.”

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What next?

In a separate report Tuesday, the Labor Department said real average hourly wages fell 0.5% from March to April, meaning “most workers are effectively taking a pay cut even as the White House touts its economic record,” The Washington Post said.