The Bureau of Labor Statistics (BLS) just confirmed what every American with a car already knows: fuel prices are so much more expensive than normal that they are painfully crimping families’ overall budgets. While prices overall continue to creep upward, prices for energy in particular has skyrocketed, according to BLS’s Tuesday release of the April 2026 Consumer Price Index (CPI). The unfortunate byproduct of the war with Iran creates headaches not only for families, but also for economic decisionmakers.

According to the BLS, the CPI — a key measure of inflation — rose 3.8% in the 12-month span from April 2025 to April 2026, up from a 12-month rise of 3.3% in March. In the month of April alone, the index rose 0.6%, down from an increase of 0.9% in March but three to four times the target rate.

Unsurprisingly, rising energy prices were the largest factor in the April CPI increase. Energy prices rose a whopping 3.8% — not for the year but for the month. Costs also rose for food (0.5%) and shelter (0.7%), but at a much more typical rate.

The eye-popping jump in energy prices is a direct result of the Iran war, where the Iranian regime has illegally choked off maritime traffic through the Strait of Hormuz, through which roughly 20% of the world’s oil supply passes. Nationwide, the average cost of a gallon of gas has jumped from $3.14 a year ago to approximately $4.50 now. That spike increases the cost of filling a 12-gallon fuel tank from $37.68 a year ago to $54 today.

The economic pain from this increase is so sharp that President Trump on Monday proposed suspending the federal gas tax.

Naturally, such a move has invited the president’s partisan opponents to attack, and congressional Democrats were happy to do so. On Tuesday, House Budget Committee Ranking Member Brendan F. Boyle (D-Pa.) declared, “From his tariff taxes to his disastrous war in Iran, President Trump is making life even harder for American families. Today’s inflation data confirms what everyone can see: costs are out of control, and President Trump is responsible.”

Much of this is obvious partisan bloviating. Today’s 3.8% inflation is far less “out of control” than the 9.1% inflation rate in June 2022, when Joe Biden was president. Furthermore, while presidents are not usually (or wholly) responsible for the nation’s economic state, President Biden had just as many bad economic policies (if not more) as President Trump.

The nugget of truth in Boyle’s bluster is that American families are really paying a price for persistently high prices — prices which grew rapidly in 2022 and continue to climb ever higher — and that a return to gas prices above $4 per gallon only adds to the suffering. Wages have not kept up with inflation; in April, real average hourly wages actually decreased by 0.5% for the month, for a decline of 0.2% on the year.

This has contributed to a sense of economic malaise among Americans. In late April, the University of Michigan’s consumer-sentiment index registered an all-time low of 49.8.

This sour mood is not only a decline from the previous all-time low of 50 in June 2022 but even beat out consumer sentiment during actual economic calamities like the enforced COVID shutdowns, the 2008-2009 Great Recession, and the stagflation of the 1970s. The sour mood persists despite the fact that consumers continue to spend at normal rates, and household finances are reportedly holding steady.

Perhaps it’s easier to con people into believing the economy is worse than it is than to convince people that the economy is better than it is. People’s household finances tell them when they are struggling, but they don’t always tell them how much. The strange nadir of consumer sentiment does not seem to be entirely related to economic fact. But perhaps the years-long economic exhaustion, combined with a media narrative that Trump is perpetuating abnormal economic destruction, has convinced many Americans that these really are the worst of times. Republicans concerned about the November midterm elections should heed the warning signs.

However, flashy though gas price shocks may be, it behooves the well-informed citizen to investigate more deeply. It is well-known that energy (and food) prices tend to fluctuate dramatically, so the BLS also calculates a CPI without energy and food categories to assess what is called “core” inflation.

In April, core CPI rose 0.4% in April and 2.8% over 12 months. This is a slight increase from the 2.6% annual increase calculated in March and the 2.7% increase forecasted by economists. That’s an increase, and it is well above the 2% target, but it shows that the energy price shocks have not caused high inflation throughout the economy as a whole.

The reason is that price shocks and inflation are two different economic conditions with the same symptom, but different causes. Price shocks result when there is a sudden decrease in supply (such as the closing of a major global waterway) without a corresponding change in demand. Like seasonal allergies, they will work themselves out over time. Inflation is a systemic infection where too much money is chasing too few goods (and services), and it requires intervention to halt the progress of the disease.

Currently, most of the price increases Americans are seeing are the result of price shocks related to the war in Iran. These are likely worth the price of eliminating Iran’s nuclear threat — if that is indeed the outcome of the war.

Yet the elevated rate of increase in the core CPI suggests that some systemic inflation persists, caused by factors such as federal deficits (thus far, the U.S. Treasury has paid $628 billion since October just in interest on the debt, or some $3 billion per day).

Dealing with such inflation is one duty of the Federal Reserve, but that body does not always find the task easy. After their latest meeting in late April, the Fed said, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.” So far, so good. However, “Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The Committee is attentive to the risks to both sides of its dual mandate.”

At its April meeting, the Fed voted 8-4 to its decision to keep rates steady but signal future rate cuts. One governor wanted a rate cut, while three did not want to even signal future cuts. No Fed meeting has seen as many dissenting votes since 1992, suggesting that the path forward for the Fed is not all that clear even to the supposed expert decision-makers.

Thus, the same factors causing headaches for families are causing headaches for decision-makers too. If the Fed cuts rates, they could stoke further inflation, while raising rates might suffocate economic growth and lead to higher unemployment.

This is often described as a Scylla and Charybdis problem. The Greek hero Odysseus faced opposite dangers when piloting his ship through the hazardous Strait of Messina. By on shore lay ship-devouring whirlpools (Scylla), while on the opposite cliffs dwelt a sailor-devouring monster (Charybdis).

The Fed likewise faces opposite dangers in unknown waters, rendered stranger by recent price shocks and tariff interventions. For now, the body has chosen to maintain a steady course until evidence of strong currents causes it to correct in either direction. Whether that choice will save the economy from casualty or catastrophe remains to be seen. But until America emerges from the fog of price shocks with a clearer diagnosis, American families will continue to feel the pinch.