April 2026 Inflation Surge

Background

Mainly due to higher energy prices from the disruption of shipping traffic through the Strait of Hormuz, prices paid by U.S. consumers and producers have significantly increased.

April’s Consumer Price Index increased by 3.8% from last April

• April’s increase was the highest in three years.
• Excluding food and energy, core inflation only increased by only 2.8%, roughly in line with the recent trend.
• Energy: ▲ 17.9%
• Gasoline: ▲ 28.4%
• Fuel Oil: ▲ 54.3%
• Airfare: ▲ 20.7%

April’s Producer Price Index increased 6% from Last April

• The highest increase since December 2022.
• Over the last 12 months, processed intermediate goods are up 9.4% while unprocessed intermediate goods are up 20.9%.
• The current energy price spike has created considerable strain within the production process. This is evident from the dramatically higher price increases for intermediate goods compared to the increase in final demand.

Bottom Line

American families are paying higher prices due to a temporary spike in energy prices. American businesses are currently eating some of this increase as prices within the supply chain have risen faster than what American families are paying at the store. Similar to tariffs, this increase in business prices will strain their business models and reduce their ability to invest, expand operations, and create jobs.