The Bureau of Labor Statistics will release its March cpi report on Friday, and economists expect it to show consumer prices rose 3.3% from a year earlier, the fastest annual pace in two years. That would be up sharply from February’s 2.4% reading, with oil-driven increases in gasoline, airfares and other goods doing much of the work.
For drivers, the pressure is already visible. U.S. gasoline averaged $4.16 a gallon on Thursday, up $1.18 since the start of the war, while U.S. oil prices topped $97 a barrel and were nearly 50% above their pre-war level. Those jumps followed one of the largest oil shocks in decades after the Middle East conflict prompted Iran’s effective closure of the Strait of Hormuz, the route for about one-fifth of global oil and natural gas supply.
The March report will capture prices for the full month and reflect 31 of the first 32 days of war, excluding only the outbreak of hostilities on Feb. 28. That makes Friday’s release one of the clearest official snapshots yet of how quickly the shock moved from crude markets into household costs, even after a ceasefire was announced Tuesday following 40 days of fighting.
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Deutsche Bank Research said the impact of the largest energy supply shock since the 1970s will be on full display, and the timing matters because the Federal Reserve is still weighing whether inflation is heating up again or just reacting to a temporary energy spike. The benchmark interest rate stands at 3.5% to 3.75%, and Jerome Powell said last month he does not think the central bank needs to raise rates, saying policymakers can wait and see how the shock plays out.
That leaves Friday’s cpi number carrying more than its usual monthly weight. If the increase comes in as expected, it will confirm that the oil shock has already reached consumers in a visible way, even if the central bank continues to treat the broader price burst as something it can look through for now.
