New data from the US Bureau of Labor Statistics shows inflation jumped sharply in March, driven largely by higher energy costs tied to President Donald Trump’s war with Iran.
According to the BLS, the Consumer Price Index rose 0.9% month-over-month in March. Energy prices led the gain, climbing 10.9% for the month, with gasoline up a striking 21.2%. On an annual basis, overall prices were up 3.3% from March 2025 — the fastest year-over-year inflation since April 2024.
At the same time, the top Democrat on the Senate Finance Committee revealed that a senior Treasury adviser said the department did not prepare for the economic fallout of the Iran conflict. Sriprakash Kothari, an adviser to Treasury Secretary Scott Bessent and Trump’s nominee for assistant secretary for economic policy, told Sen. Ron Wyden’s staff that “not only did he not perform any work related to energy markets leading up to the war, but that he wasn’t aware of anyone at Treasury who did,” Wyden wrote in a letter to Bessent.
Kothari said he had not done any analysis on energy markets or other economic aspects before the strikes began on February 28, and that his work on the matter started only after learning about the attacks from news reports. When asked if anyone at Treasury had performed related analysis beforehand, Kothari said he was not aware of anyone who had.
Wyden called the lack of basic planning “unacceptable,” especially as the US faces a “rapidly growing affordability crisis” worsened by the war. Intelligence assessments had warned that Iran could inflict significant damage and disrupt shipping — particularly oil flows through the Strait of Hormuz — risks which, Wyden noted, were foreseeable.
The conflict’s economic cost has been steep. Analysts estimate the first six weeks of the war have cost US taxpayers more than $30 billion, and American drivers paid over $8 billion extra at the pump in the first month after the assault as oil prices surged.
Media reporting has suggested the Trump administration underestimated Iran’s willingness to close the Strait of Hormuz in response to US strikes. While Energy and Treasury officials attended some planning meetings, reporting indicates that the kind of agency analysis and forecasts that informed past administrations’ decisions were treated as secondary.
Economists and commentators quickly linked the March inflation spike to the war. University of Michigan economist Justin Wolfers called the March numbers “the first numbers showing economic effects of the war in Iran” and warned “there’s more to come.” New York Times economics reporter Ben Casselman noted the 3.3% annual rise was the fastest inflation rate of Trump’s second term and was driven almost entirely by higher energy prices.
Heather Long, chief economist at Navy Federal Credit Union, highlighted that wage gains are being largely offset by inflation: wage growth was +3.5% over the past 12 months while inflation was +3.3%, leaving many households’ real pay stagnant.
Elizabeth Pancotti of Groundwork Collaborative said the price spike “comes as no shock to anyone who has filled up their gas tank,” and warned the impact would extend beyond fuel to summer travel, groceries, and electronics as the war disrupts global supply chains. “By pursuing this illegal war, the president has made it clear that he’s putting American families last,” she said.
Republicans sought to emphasize that core inflation, which excludes food and energy, rose less than expected. The GOP touted that core inflation was “lower than expected” for March, framing it as a sign the administration is outperforming predictions. Critics, however, pointed out that when gasoline and energy surge, core measures offer limited solace to consumers facing higher prices at the pump, where national averages reached about $4.15 per gallon.
Observers noted that previous administrations, including the Biden White House, also pointed to core inflation to reassure voters, often with little political traction. Vox senior editor Benji Sarlin quipped about the effort to distinguish topline and core inflation during an oil shock, implying such arguments are unlikely to satisfy the public facing sharp gas-price increases.
– Common Dreams
