March CPI Report Anticipated to Show Inflation Surge Amid Rising Energy Costs

The Consumer Price Index (CPI) for March 2026 is scheduled for release on Friday, April 10, at 8:30 a.m. ET. Economists anticipate the report will show a 3.3% annual increase, marking the highest inflation rate since May 2024 and nearly a one percentage-point rise from February's figures.

This anticipated surge is largely attributed to escalating energy prices resulting from the ongoing conflict in Iran. The U.S. has experienced the largest one-month jump in fuel costs since at least 1957, according to Pantheon Economics. Oxford Economics forecasts that the impact of the war on energy prices will push headline CPI inflation well above 3% in March and above 4% by April.

The conflict's disruption of global energy supplies has led to significant increases in fuel costs, which are expected to have a cascading effect on the prices of various goods and services. Higher transportation and production costs are likely to drive up the cost of other goods, including food. Energy prices tend to rise quickly during disruptions to oil supplies but fall more slowly after a crisis ends—a phenomenon economists call the "rockets and feathers" principle.

The expected increase in the CPI comes after inflation cooled to a 2.4% annual rate in the first two months of 2026—still above the Federal Reserve's 2% target but far below the 40-year high of 9.1% recorded in June 2022.

On Thursday, another key measure of inflation signaled that everyday costs were elevated in February even before the Iran war, rising 0.4% from January. The Personal Consumption Expenditures price index also showed that consumer spending rose 0.5% in February from the prior month, but that falls to 0.1% when adjusted for inflation, according to EY-Parthenon chief economist Greg Daco.

Even before the Iran war sent gas prices soaring, many Americans were still recovering from the pandemic-era inflation spike and continued to cite affordability as a major concern. The Trump administration has said that "gas prices will plummet back to the multi-year lows American drivers enjoyed before these short-term disruptions" from the Iran war.

After the U.S. announced the truce with Iran on Tuesday, the U.S. oil benchmark tumbled almost 15%, falling to $96.41 a barrel. But that remains 43% higher than just before the war, signaling consumers may not see much relief in the next few weeks.

Consumers have already paid an additional $8.4 billion in fuel costs in the month after the Iran war started, according to an estimate from the Joint Economic Committee's Democratic minority. Higher prices for other goods and services, from airline fees to higher mortgage rates, could also weigh on household finances.

Rising prices could pressure household budgets and derail consumer spending if Americans pull back on discretionary purchases, Federal Reserve Bank of Chicago President Austan Goolsbee told CBS News earlier this month. Because consumer spending accounts for about 70 cents of every $1 of GDP, a hit to household finances could ripple through the economy.

Even before the Iran war, some consumers were showing signs of financial distress, said Elizabeth Pancotti, managing director of policy and advocacy at Groundwork Collaborative, a left-leaning think tank. Hardship withdrawals from 401(k)s reached a record last year, while loan delinquency rates even among higher-income households rose in 2025.

Businesses are also feeling the impact of higher energy prices, as well as disruptions to other key supplies shipped through the Strait of Hormuz. While about 20% of global energy supplies travel through the vital waterway, other commodities—including helium, aluminum, and fertilizer—also pass through the strait.

The Federal Reserve will need to grapple with higher inflation, as well as a labor market that has swung from monthly job losses to gains over the past year. In March, the Fed had penciled in one interest rate cut for 2026, but the expectation of higher inflation this year has caused many economists to scrub that cut from their forecasts.

Minutes released Wednesday of the Fed's March 17-18 meeting, where it held borrowing costs steady, also suggest that some policymakers on the central bank's 19-member interest-rate setting panel think it may become necessary to consider a future rate hike.

If there's one bright spot on inflation, it's that the impact of the Trump administration's tariffs has waned, with the effective tariff rate now at about 8%. That's down from a peak of 21% in April 2025, when the president first announced his wide-ranging tariffs, according to the Yale Budget Lab.

The impact of higher import costs is now waning, Bernard Yaros, lead U.S. economist at Oxford Economics, told CBS News. "Most of the tariff pass-through has occurred."