US key inflation rises to 3-year high as fuel, food costs squeeze households

Inflation in the US accelerated in April to its highest level in three years, driven by rising fuel and food prices as the economic fallout from President Donald Trump’s Iran war continued to weigh on household budgets.Data released by the Commerce Department on Thursday showed that the personal consumption expenditures (PCE) index — the Federal Reserve’s preferred inflation gauge — rose 3.8 per cent year-on-year in April, up from 3.5 per cent in March and the highest since May 2023, AP reported.The latest reading matched economists’ expectations in a Dow Jones Newswires and Wall Street Journal survey.On a monthly basis, prices rose 0.4 per cent in April, slowing from the 0.7 per cent increase recorded in March.The report indicated that inflation pressures have spread beyond fuel prices, with costs rising across several categories, raising concerns that inflation may remain elevated for longer than expected.Excluding volatile food and energy prices, core PCE inflation rose to 3.3 per cent in April from 3.2 per cent in March — the highest level since November 2023.However, on a monthly basis, core prices increased by a relatively moderate 0.2 per cent in April.