San José, CA – On Tuesday, May 12, the Bureau of Labor Statistics, a part of the Department of Labor, reported that the inflation rate continued to increase in April. Consumer prices, on average, were 3.8% higher than April of 2025, up from a 3.3% annual increase in March.

The rising costs of energy drove the increase in prices, on the backs of higher fuel prices as a result of Trump’s war on Iran. Gasoline prices were up 28.4% over a year ago. Electricity rates were up 6.1% from a year ago.

These higher prices mean that the purchasing power of workers’ incomes, or what economists call real income, fell in April as compared to March, and also fell compared to a year ago. Using another measure of prices paid by workers, the CPI-W, real wages or hourly earnings fell 0.3% in April from March, and fell 0.2% as compared to a year ago.

There were also signs that higher fuel and energy prices are spreading to goods and services that use a lot of energy to produce. With diesel fuel prices up over 60% from a year ago according to the AAA (American Automobile Association), transportation costs are showing up in the higher prices for food, up 0.5% in April as compared to no increase in March. Airline fares have soared, up more than 20% as compared to April 2025, as jet fuel prices have almost doubled.

While economists often refer to the “core” rate of inflation, which takes out food and energy costs as they are more variable month to month, this means that the actual rate of inflation for lower and middle income households is actually greater than the headline (total) inflation, since those consumers spend more of their income on necessities like food, gasoline and electricity.

With Trump polling at all-time lows, with 70% of people disapproving of him on the economy, Congress is proposing to suspend the federal gasoline tax. However, the tax is only 18 cents a gallon, or about 4% of the current national average price. But with gasoline up more than 40% since the war started, this would at most offset 10% of the increase. Further, the gasoline tax is an excise tax that the seller pays, so there is no way to ensure that the gasoline sellers pass on the tax cut to drivers.

With no end in sight to the war that is blocking the flow of oil, gas, fertilizer, sulfur (used in industry) and helium (used in a lot of tech industries), higher prices are likely to spread to more and more goods and services.

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