Inflation jumps to 3.8%, outpacing wage growth

Inflation surged to 3.8% in April, its highest level in nearly three years, as the war in Iran causes a ripple effect across the economy and energy prices rise.

Inflation surged to 3.8% in April, its highest level in nearly three years, according to data released Tuesday, as the war in Iran causes a ripple effect across the economy and energy prices surge.

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As inflation continues to accelerate, it’s eating into Americans’ wages at a rapid clip. April’s inflation rate means that prices are now rising faster than wages for the first time since 2023, which could exacerbate the affordability crisis that has already been gripping consumers.

The pace of wage gains has been slowing over the past two years. In November, wage growth continued to rise at a pace of almost 4%. April’s jobs report, which was released on Friday, showed that wage growth had slowed to 3.6%.