FILE-A fuel pump is shown as a driver refuels a vehicle with diesel fuel at a Shell gas station in Seattle, Washington, on Monday, March 9, 2026. (M. Scott Brauer/Bloomberg via Getty Images)
The biggest monthly spike in gas prices in 60 years contributed to a surge in inflation in March.
Gas prices averaged $4.15 a gallon nationwide on Friday, an increase from $2.98 on the day before the Iran war began and an increase of almost 40%, The Associated Press reported, citing AAA data.
Higher gas prices are likely to affect the finances of many Americans when it comes to managing other expenses like food, rent, and utility bills.
Consumer Price Index data for March
By the numbers:
The Department of Labor released data Friday that shows consumer prices jumped 3.3% in March compared to 2025, up from just 2.4% in February and the biggest yearly spike since May 2024. The federal agency noted that prices climbed 0.9% in March from February, the largest increase in almost four years.
Core prices increased 2.6% in March from a year earlier, up from 2.5% in February. The Labor Department didn’t include volatile food and energy categories in this data point. Also in March, core prices jumped 0.2%, implying that soaring gas prices haven't yet spread to many other categories.
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Grocery prices in March fell 0.2% and are up 1.9% from 2025, and the Associated Press reported that financial analysts expect food prices to move higher in the coming months as soaring diesel prices make shipping more expensive.
Moreover, clothing costs jumped 1% in March from the previous month and are up 3.4% from a year earlier. Used car prices, however, fell 0.4% last month and dipped 3.2% from 2025.
Rising gas prices related to the Iran war have altered inflation’s path, from a gradual plunge to a significant rise from the Federal Reserve’s 2% interest rate target.
The Associated Press reported that the Federal Reserve could delay any cut in interest rates for months. Fed officials will also look past the increase in headline inflation, and focus on core prices, which are likely to rise gradually.
The Source: Information for this story was provided by Labor Department data on the consumer price index for March and The Associated Press. This story was reported from Washington, D.C.