Tuesday, May 12, 2026

ANNALS OF TRUMPI$TAN: Inflation Accelerates After Weeks of War in Iran. (Lydia DePillis, NY TIMES, MAY 12, 2026)

From The New York Times:

Inflation Accelerates After Weeks of War in Iran


The Consumer Price Index rose 3.8 percent in April from a year earlier, as increasing energy costs replaced tariffs as the driver of higher prices for Americans.

Annual change in C.P.I.

Note: Data is seasonally adjusted year-over-year change in the Consumer Price Index. October 2025 is missing because of the government shutdown.

Source: Bureau of Labor Statistics.

The New York Times

Pinned
Lydia DePillis

What to know about the report.

Consumer prices in the United States rose last month at the fastest rate since May 2023, as sharp increases in energy costs caused by war in the Middle East made life more expensive for American consumers.

The Consumer Price Index rose 3.8 percent in April from a year earlier, the Labor Department reported on Tuesday, up from a 2.4 percent annual increase before the conflict started in February and a 3.3 percent increase in March.

The increase was driven largely by energy prices, up 3.8 percent since the previous month. But the “core” index, stripping out volatile food and energy prices, also rose 2.8 percent over the year in April, up from 2.6 percent in March.

Here’s what else to know about the report:

  • Fuel costs:Higher energy costs are bleeding into prices for transportation including airline fares, which rose 2.8 percent in April, as well as goods that get to market in a truck or on a boat. Follow oil prices here.

  • Food prices:Grocery costs rose 2.9 percent since last April, driven largely by the price of beef, which has been rising because of smaller cattle herds. Tomatoes have risen nearly 40 percentsince a year ago because of a combination of tariffs, severe weather and higher fuel costs. And steel tariffs are raising the prices of canned foods.

  • Political fallout:The report spells bad political news for President Trump, who has struggled recently to sell his economic agenda to voters, with majorities saying in poll after poll that they are frustrated with the rising cost of living. A White House statement acknowledged the consequences of the war with Iran, but pointed to actions in areas like drug pricing, arguing that those costs have fallen and saying the president’s agenda “continues to deliver.”

  • Fed outlook:Although the Federal Reserve has said it looks past swings in energy costs, as they are generally expected to recede before translating into underlying inflation, the hotter-than-expected measure will weaken the case for cutting interest rates this year. With the strong jobs report last week, many analysts had already moved back their forecasts for cuts into 2027.

  • Statistical quirks:Unable to collect housing data on its normal schedule because of the government shutdown last fall, the Bureau of Labor Statistics had to wait until April, masking what might have been a swifter deceleration given cooling rents and home prices. Rents and the measure of costs for people who own their home both rose 3.3 percent over the year, up from an annual increase of 3 percent for the previous three months.

Talmon Joseph Smith

The economics team at RSM, a consulting firm that specializes in forecasting, projects that as the supply shock from the war in the Middle East works its way through the U.S. economy, inflation will peak “at or above” 4.5% on annual basis sometime this summer. 

Ben Casselman

The jump in prices means that workers’ wages are, once again, failing to keep up with inflation. The cooling labor market means that average hourly earnings have been rising more slowly, up 3.6 percent over the past year, and 0.2 percent over the past month. That slowdown, combined with the spike in energy prices, means that hourly earnings, adjusted for inflation, fell 0.5 percent in April, the second straight monthly decline. Real wages fell sharply during the peak of the post-pandemic inflation surge, but had been rising steadily in recent years.

Annual change in select products

Note: Data is seasonally adjusted year-over-year change in categories of the Consumer Price Index.

Source: Bureau of Labor Statistics.

The New York Times

Talmon Joseph Smith

Diane Swonk, the chief economist at KPMG, said in a research note that the danger of energy inflation spiraling out of control still looms with the war in Iran unresolved, as of now. “We are unlikely to see a repeat of the 1970s,” she said, “but the risks are rising.”

Julie Creswell

Tomato prices are soaring as war, tariffs and weather affect a popular crop.

Image
Tomatoes were the culprit behind a rise in food prices at grocery stores in April. Credit...Justin Sullivan/Getty Images

The price of tomatoes — tart bursts of flavor in salads and sandwiches — surged nearly 40 percent in April from a year ago on a combination of bad weather, high tariffs and climbing transportation costs.

Overall, food prices in grocery stores rose 2.9 percent in April from a year ago and were up 0.7 percent from March, according to the Consumer Price Index.

Fresh fruits and vegetables — perishable items that faced higher shipping and trucking costs as fuel prices surged in the past month — soared 6.5 percent in April from a year ago.

While prices for bananas and citrus fruits also climbed, the real culprit for much of the steep rise was tomatoes.

By some estimates, more than 70 percent of the fresh tomatoes consumed in the United States come from Mexico, where unseasonably wet weather and disease resulted in below-normal yields. And freezes in key growing areas of Florida early in the year also affected the tomato crop.

Tariffs on Mexico have also pumped up prices. After the Trump administration ended an agreement last yearthat allowed tomatoes to be imported into the U.S. from Mexico for free, tariffs on tomatoes jumped to about 17 percent.

And when the conflict with Iran started to send fuel prices higher, grocery analysts warned that fresh fruit and vegetables that are either shipped or truckedinto the U.S. would be among the first to feel the impact of the fuel surcharges.

Ben Casselman

Another place that the war is showing up in the data is in airfares, which were up more than 20 percent from a year earlier. Airlines have been raising fares directly in response to higher jet fuel prices, and have also been imposing higher fees, including for checked luggage. Such fees are included in the government’s price estimates.

Ben Casselman

Kevin Warsh, the incoming Fed chair, has talked about focusing on some alternative measures of inflation beyond the “core” rate that tends to get the most attention. In particular, he has talked about looking at “trimmed mean” measures, which strip out whichever categories are most volatile in any given month, rather than always excluding food and energy.

That measure didn’t tell a very comforting story in April, however. According to an estimate from Omair Sharif of Inflation Insights, the trimmed mean measure rose 0.44 percent in April, slightly faster than the traditional core measure. (The Cleveland Fed, which publishes the trimmed mean measure, will release its official figure later today.)

Talmon Joseph Smith

Markets have, predictably, reacted to today’s data by pushing yields higher. But zooming out, considering the price volatility of the past few years, many analysts find it remarkable how contained interest rates have been. The benchmark 10-year Treasury, which affects the price of consumer loans, has been mostly locked in a range of just above or just below 4 percent for 3 years straight.

Talmon Joseph Smith

One of the reasons underlying core inflation remains elevated is because the economy has lost some major sources of price decreases, especially in goods categories. We see that this month in apparel, which rose 4.2 percent on an annual basis in April. Prepandemic it was more typical for apparel prices to be falling.

Tony Romm

Predictably, the inflation report drew sharply divergent takes on Capitol Hill, with Democrats blaming rising prices on President Trump and Republicans seemingly brushing off some of the data.

“Trump’s failed economic policies aren’t just raising costs, they’re shrinking families’ paychecks,” said Senator Elizabeth Warren, Democrat of Massachusetts, adding in a statement that the president’s tariffs and ongoing war with Iran are partly to blame.

Tony Romm

Contrast that with the statement from Representative Jason Smith, Republican of Missouri and chairman of the tax-focused House Ways and Means Committee. While Mr. Smith acknowledged that Americans are looking for “additional relief,” citing high inflation that began under President Biden, the congressman touted the fact that Republicans worked to “deliver the largest tax cuts in American history.”

Many analysts have actually found that families’ expected, larger tax refunds had essentially been eaten up by rising gas prices.


Ben Casselman

According to today’s report, gas prices rose 5.4 percent from March to April. If you’ve been watching prices at the pump, you might have thought they rose more than that — and you’d be right. The inflation data is “seasonally adjusted,” meaning it accounts for regular seasonal patterns in the data. On an unadjusted basis, gas prices rose 11 percent in April, but because pump prices typically rise in the spring, the reported figure is lower.

Sydney Ember

As prices have continued to increase, Americans’ outlook for the economy has soured. Consumer sentiment in May fell to its lowest level on record, according to the University of Michigan’s survey. Roughly a third of respondents “spontaneously mentioned gasoline prices,” according to a note accompanying the survey results.

Sydney Ember

One factor that is making price increases particularly painful for consumers is simultaneously slowing wage growth. Average hourly earnings increased 3.6 percent in April compared to a year earlier, but has been trending down. That has pinched workers and forced many to dip into their savings.

Joe Rennison

Investors had already ruled out the idea of the Federal Reserve cutting interest rates this year due to persistent inflation. This month, the balance has tilted toward the potential for the central bank to raise interest rates next year.

Fed officials feel comfortable focusing on inflation in large part because the labor market looks relatively stable. April’s jobs report showed the unemployment rate steadying at 4.3 percent and employers adding 117,000 jobs, far more than expected.

Just a couple of months ago, the labor market looked much shakier. Last fall, the Fed took steps to shore it up, delivering a series of reductions that put rates in a range of 3.5 percent to 3.75 percent. Officials feel comfortable maintaining that level for the foreseeable future given resurgent inflation risks stemming from the Iran war. Any sign that the labor market is sharply weakening, however, would likely change that calculus.

Ben Casselman

Central bankers thinking about adjusting interest rates typically try to “look through” short-term shocks like oil price spikes. The logic is that these kind of one-off events don’t have much impact on inflation in the longer run. But the risk is that if they keep happening, consumers and businesses will eventually come to expect higher inflation and behave accordingly. That could make it harder for policymakers to bring inflation back under control.

Ben Casselman

Christopher J. Waller, a Fed governor — and, at one point, a candidate for Fed chair — discussed this risk last month in a speech provocatively titled “One Transitory Shock After Another.” There isn’t much sign yet that consumers have begun to expect higher inflation in the long run, he said. But the longer oil prices remain elevated because of the war, the greater the risk of that changing.

Joe Rennison

Stocks fell as trading opened in New York on Tuesday, with higher oil prices underscoring the worrying signs of inflation in the fresh data released this morning. The S&P 500 fell roughly 0.4 percent, following a 0.2 percent rise on Monday.

Tony Romm

All of this comes as the Senate prepares to confirm Kevin M. Warsh as the next chair of the Federal Reserve as soon as this week.

Late Monday, the chamber took the first in a series of procedural steps toward installing the president’s new pick at the central bank. Later this morning, they will officially vote on Mr. Warsh’s 14-year term as Fed governor. Then follows another procedural vote, and perhaps tomorrow, the Senate will hold one last vote to confirm him as chair.

In a statement, the White House maintained that the inflation report actually “reinforces” that President Trump’s broader economic agenda “continues to deliver.” While acknowledging the consequences of the war with Iran, the administration pointed to Mr. Trump’s other actions in areas like drug pricing, arguing that those costs have fallen.

“President Trump has always been clear about temporary disruptions as a result of Operation Epic Fury,” Kush Desai, a White House spokesman, said in a statement. He added: “The Trump administration remains laser-focused on delivering growth and affordability on the home front while working to eliminate the Iranian nuclear threat.”

Ben Casselman

For consumers, what’s adding to the pain is that this latest round of price increases comes on top of years of elevated inflation. Grocery prices are up 2.9 percent over the past year, but they’re up more than 30 percent since before the pandemic. Many Americans still remember what their grocery bill looked like a few years ago, and polls show that they are frustrated and angry about how much they’re paying now.

Colby Smith

The CPI report comes at a pivotal moment for the Fed. Jerome Powell’s term as chair ends on May 15 and the Senate is in the process this week of confirming his replacement, Kevin Warsh. The final confirmation vote is expected to take place on Wednesday.

Colby Smith

What is becoming increasingly clear is that Warsh is going to struggle to deliver the rate cuts that President Trump has repeatedly demanded of the Fed. Policymakers at the central bank have already turned wary about the need to provide relief and some have even gone so far as to suggest that the Fed should signal that a rate increase is just as likely as a rate cut at this juncture.

Rate decisions are made by a 12-person committee, including the chair, six other governors, the president of the New York Fed and a rotating set of four other presidents from the 12 regional banks. Warsh’s primary task as chair will be to build consensus among these policymakers.

Tony Romm

Today’s inflation report spells bad political news for President Trump, who has struggled recently to sell his economic agenda to voters. In poll after poll, majorities say they are frustrated with the rising cost of living, yet as the latest data show, those costs under Mr. Trump continue to rise, most recently as a result of his war with Iran.

Since that conflict began in late February, the president has downplayed its costs while insisting the fallout would be temporary and short lived. Nevertheless, gas prices are much higher than they were a year ago. By Tuesday morning, the average gallon topped $4.50 nationally, per AAA, more than a dollar higher than this same time in 2025.

The average price of regular gas stands at $4.50 a gallon today, according to AAA, as the war in Iran continues to push up energy prices. So far, consumers have largely withstood higher gas prices, which effectively act as a tax, but it is not clear how long they can hold firm. Lower income consumers especially are being forced to make hard decisions about spending, on gas and other expenses. 

Ben Casselman

Everyone knew today’s inflation numbers were going to be ugly given what’s been happening with gas prices. But what will worry economists, including policymakers at the Fed, is that underlying measures that exclude energy also rose more quickly in April. Some of that was about statistical quirks related to last fall’s government shutdown. But there are also signs that inflation continues to run uncomfortably hot beneath the surface.

Colby Smith

One of the key measures that the Fed looks at is what is known as “supercore” inflation, which strips out housing-related costs and is seen as another good gauge of underlying inflation. In April, it rose 0.45 percent, up from 0.17 percent in March.

This is not what officials at the Fed want to see.

The New York Times

Oil prices rise on U.S.-Iran standoff.

Oil prices edged higher and global stock markets cooled on Tuesday after the Consumer Price Index showed that U.S. inflation in April rose at the fastest rate since May 2023, as sharp increases in energy costs caused by the U.S.-Israeli war with Iran made life more expensive for consumers.

Peace talks between the United States and Iran remained shaky. President Trump was scheduled on Tuesday to depart for Beijing to meet with China’s leader, Xi Jinping, in a summit that could help shape the future of the conflict. Mr. Trump said on Monday that the cease-fire was “on massive life support” after rejecting the latest Iranian offer to end the war and reopen the Strait of Hormuz, the vital waterway through which nearly a fifth of the world’s crude oil is usually carried on cargo ships.

Oil prices climb again.

  • The price of Brent crude, the global benchmark for oil, rose more than 3 percent on Tuesday, climbing above $107 a barrel.

  • West Texas Intermediate crude, the U.S. benchmark, rose over 3 percent, trading above $101 a barrel.

Price of Brent crude oil

How much the international benchmark costs

020406080$100 per barrel
Inflation Accelerates After Weeks of War in Iran - The New York Times

Notes: Data shows future contract prices for Brent crude oil. Gaps indicate nontrading hours. Data is delayed at least 15 minutes.

Source: FactSet.

The New York Times

Stocks tumble on shaky cease-fire.

  • The S&P 500 fell about 0.4 percent when trading began on Tuesday; the index had edged higher the day before.

  • Stocks in Europe slid. The Stoxx 600, a broad European index, slipped a little less than 1 percent. In Britain, where Keir Starmer is fighting to save his premiership, the FTSE 100 edged lower.

  • In South Korea, the benchmark Kospi index, which has been setting record highs thanks to excitement over artificial intelligence, shed more than 2 percent after talk of a tax on A.I. profits.

S&P 500 index

How stocks are trading in the United States

Today0.84
6,4006,6006,8007,0007,2007,400

Note: Data delayed at least 15 minutes.

Source: FactSet.

The New York Times

Gas prices dip.

  • Gas prices fell two cents on Tuesday, to a national average of $4.50 for a gallon of regular, according to the AAA motor club. Despite the decline, gas prices are up 51 percent since the conflict began.

  • Gas prices don’t move in lock step with changes in crude oil prices, usually trailing increases or drops by a few days.

  • The average price of diesel held steady at $5.64 on Tuesday, up 50 percent since the start of the war.

What they are saying: Inflation is a “key focus.”

  • Fading hopes for a peace deal have kept oil prices elevated and reinforced inflation concerns, pushing the yield on U.S. Treasury bonds higher, Bob Savage, the head of markets macro strategy at BNY, wrote in a note. “Inflation will be the key focus for the U.S. markets this morning,” he said.

  • The Consumer Price Index rose 3.8 percent in April from a year earlier, driven largely by energy prices. Stripping out the volatile food and energy components, the inflation index rose at a 2.8 percent annual pace.

Steel tariffs are raising the price of canned foods.

Image
An up-close look at rolls of silvery, shiny steel.
Rolls of tin-plated steel at Ohio Coatings in Yorkville, Ohio.

The simple tin can is proving to be one of the toughest tests for President Trump’s tariffs.

Just over a year ago, Mr. Trump imposed high tariffs on steel to try to stifle imports of the metal and bolster domestic production.

But imports of the kind of steel used to make cans surged in 2025, and American can makers say they will remain heavily dependent on foreign supplies — now made more expensive by the tariffs — for a long time.

“We have to import all this tin plate,” said Scott Breen, the president of the Can Manufacturers Institute, referring to the thinly rolled steel that is coated with tin and used to make cans. “There’s not any more being produced here than there was before.” The institute is a trade group representing some of the largest can makers in the United States.

Unlike some of Mr. Trump’s other tariffs, which have been overturnedby courts, the steel levies have strong legal standing, according to scholars, which means they are unlikely to go away anytime soon.

They were imposed under a national security provision called Section 232 of the Trade Expansion Act — and, at 50 percent, are higher than many of Mr. Trump’s other import taxes.

A can makes up about a third of the wholesale price of canned fruits or vegetables. And as Mr. Trump’s tariffs pushed up the cost of tin plate, canned food prices have risen, burdening households that rely on such staples as corn and beans.

In March, canned fruits and vegetables cost 5.7 percent more than they did a year earlier, compared with a 2 percent increase for all food consumed at home, according to government data.

Over 80 percent of the tin plate used in the United States last year was imported, according to Harbor Intelligence, a metals markets analysis firm. Tin plate is produced in much lower volumes than the steel used to make cars and buildings, making it a less attractive business for large steel companies.

Still, U.S. Steel, the biggest U.S. producer of tin plate, recently announced that it was planning to make more, by restarting production next year at a facility in Gary, Ind. — a potential sign that Mr. Trump’s tariffs are spurring investment.

A spokesperson for the Commerce Department, the agency behind the steel tariffs, said that tin plate mills closed under President Joseph R. Biden Jr., and that Mr. Trump’s policies were improving the business environment for tin plate makers, pointing to U.S. Steel’s plans for its Gary plant.

But even with the new supply from U.S. Steel, American can makers are likely to import over two-thirds of their tin plate in the coming years, steel executives and analysts said.

The current challenges affecting the tin plate market are not lost on Dave Luptak, the chief executive of Ohio Coatings. His company buys steel rolled as thin as a business card and coats it with tin at its factory in Yorkville, Ohio.

Rolls of steel at the Ohio Coatings factory in Yorkville. The company imports around three-fourths of its thin, uncoated steel, on which it must pay tariffs.

Workers at the facility, most of whom are in the United Steelworkers union, make the tin plate by running the thin steel, known as blackplate, through a line that coats it with tin via a chemical-electrical process. Last year, the factory produced 162,000 tons of tin plate for its can making customers.

Mr. Luptak said he supported Mr. Trump’s tariffs because they protected the American steel industry from foreign factories, particularly in China, where production is heavily subsidized. But Ohio Coatings imports around three-fourths of its blackplate, on which it must pay tariffs.

Mr. Luptak said the imposition of the tariffs did not mean the company was paying 50 percent more for the foreign blackplate. That’s because, he said, Ohio Coatings’ suppliers had cut their price to offset some of the tariff. He also said the company had raised what it charged its customers by a “single-digit” percentage last year. Still, Mr. Luptak said that Ohio Coatings had absorbed some of the cost of the tariff and that its profits had taken a hit.

“Our margins are challenged,” he said. 

Ohio Coatings has asked the Trump administration to consider temporarily waiving the tariffs on blackplate. This, Mr. Luptak explained, would give his company and other American steel makers time to set up new lines to make tin-plate steel and reduce the United States’ reliance on imports.

A decade ago, American producers made over 60 percent of the tin plate, blackplate and another type of packaging steel used in the United States, according to Harbor Intelligence. But last year they produced less than 20 percent. In recent years, American steel companies shut down tin plate lines. They said they couldn’t compete with imports, and other types of steel production had better margins. That left Ohio Coatings and U.S. Steel as the only producers of tin plate. U.S. Steel also makes blackplate, some of which it sells to Ohio Coatings.

U.S. Steel didn’t say how much tin plate — the finished product — it might produce after restarting production at its Gary factory. “It will depend on a number of factors,” said Amanda Malkowski, a spokeswoman for U.S. Steel.

Ohio Coatings buys steel rolled as thin as a business card and coats it with tin at its factory.

Last year, as part of a deal to sell U.S. Steel to Japan’s Nippon Steel, the U.S. government obtained a “golden share” in the American steel producer that gives it significant influence over the company. Because of the golden share, some analysts said, it is possible that the Trump administration leaned on U.S. Steel to restart tin plate production at Gary.

“It’s kind of hard to know what’s economics and what’s politics there,” said Scott Lincicome, a vice president at the Cato Institute, a research organization that favors free markets and opposes many tariffs.

Ms. Malkowski said reopening the factory “was a business decision.”

Cleveland-Cliffs, an American steel company, decided to stop producing tin plate after it lost an “anti-dumping” case at the International Trade Commission in 2024. The company had sought high duties on tin plate imported from Canada, China, Germany and South Korea.

Despite Cleveland-Cliffs’ defeat, U.S. Steel said last month that it was bringing its own case to the trade commission, alleging tin-plate dumping of products from China, Taiwan and Turkey. In its petition, U.S. Steel said those imports were taking sales from domestic producers “by offering aggressively low prices.”

But the petition does not show imports getting significantly cheaper.

In the petition, U.S. Steel said imported Turkish tin-mill products on average cost $1,057 a ton last year, roughly the same as $1,083 a ton in 2023. But while U.S. Steel said the Turkish products cost 8 percent less than the American ones in 2023, it said they were 75 percent cheaper last year.

In explaining how the discount could have grown so much in two years, a person familiar with the petition said U.S. Steel had increased its tin-mill prices to what it believed was a fairer level.

As tariffs push up the cost of American canned goods, imports of foreign canned goods are rising. That’s in part because they benefit from a loophole that puts American canned products at a disadvantage: Imported foreign cans are exempt from the steel tariffs when they contain food.

The Can Manufacturers Institute, the trade group, called for the steel tariffs to be imposed on imported food-filled cans, but the Trump administration did not do so when it revampedthe steel tariffs last month. In a news release, the trade group said the administration’s failure to act would open “the floodgates to more foreign-filled cans on grocery store shelves.”

Mr. Lincicome said it would be “lunacy” to put tariffs on food when affordability was a concern of many voters. And he said he was not surprised that imports of foreign canned goods were rising.

“When you raise the cost of making stuff in the United States, which in this case is making canned foods, you make production here less competitive globally,” Mr. Lincicome said.

Talmon Joseph Smith

Higher gas prices are hitting lower-income Americans the hardest.

Image
A person grabs a fuel pump at a gas station.
Gas prices have soared since the start of the war with Iran.Credit...Jenny Kane/Associated Press

Surging gas prices are inflaming a longstanding economic divide in America, as households with lower incomes struggle to pay more at the pump at a moment when prices are already elevated.

After more than two months of war in the Middle East, the national average gas price has surpassed $4.50 a gallon. And according to an analysis released by the Federal Reserve Bank of New York on Wednesday, the burden of the surge is falling hardest on those with the least room to absorb it.

Economists at the New York Fed found that higher-income people increased spending on gasoline the most in March, but the amount of gas they bought when adjusted for inflation was “essentially unchanged,” a sign that their behavior has been largely unaffected by the fuel price surge.

Lower-income households, however, spent much more on gasthan usual but cut back on the amount of gasoline they bought by driving less or “potentially by car-pooling or substituting to public transit where available,” according to the report.

The report’s title, “A K‑Shaped Pattern at the Pump,” refers to what economists have broadly been calling the “K-shaped” state of economy, in which higher-income households thrive and drive economic growth while those at the bottom slide in comparison.

Iran’s retaliatory closure of the Strait of Hormuz, a key energy channel, has sent oil prices soaring more than 50 percent from prewar levels. Oil prices fell more than 6 percent early Wednesday after President Trump pressed Iran to agree to a deal to end the war.

But oil market prices have been subject to these headline-driven gyrations for weeks and remain well above their levels near $60 a barrelin mid-February, before the war. Fears of a global petroleum shortage are still alive among oil analysts. And while investors and officials in Washington weigh the course of the conflict overseas, rank-and-file workers and commuters across the countryare left managing the repercussions.

Danielle Sollers, 44, works as a driver in Charleston, S.C., putting in eight- or nine-hour shifts for Uber and Lyft. Gas prices have surged above $4 a gallonin her area, upending her already-tight budget.

“I was paying well below $3 a gallon, damn near almost $2, then it felt like, within a week or so, it spiked,” Ms. Sollers said.

Ms. Sollers drives a Kia sedan, specifically because of the above-average miles per gallon it provides. But the roughly 60 percent jump — from paying about $25 per fill-up to $40 or more — has eroded her take-home pay, especially on slower weekdays with fewer riders.

“It’s rough,” she said. “Now, you’re only making 100 to 160 bucks a day.”

The jolt in the oil market has also caused the price of other forms of fuel and petroleum-dependent products to rise: diesel, jet fuel, fertilizer and plastics. Airfares have steeply risen in recent weeks. Food inflation is also expected to tick up once the costs of fertilizer and energy-intensive packaging and transportation filter through.

The New York Fed’s analysis noted that the K-shaped gasoline consumption patterns “qualitatively match” the unequal trend that occurred after the spike in energy prices at the start of the Russia-Ukraine war in 2022, the last time gasoline and crude oil prices were this elevated. Russia’s invasion of Ukraine wreaked global havoc in commodity markets. The ensuing supply chain chaos caused elevated inflation at the time to surge even higher.

Gbenga Ajilore, the chief economist at the Center on Budget and Policy Priorities, who served as an economic development official during the Biden administration, said the pain consumers felt at the gas pump in 2022 and the pressure facing them now stemmed from different root causes.

“The Biden administration didn’t make Russia invade Ukraine,” Mr. Ajilore said.

Domestic blowback from the Trump administration’s attacks in Iran is, in Mr. Ajilore’s view, more of a self-created conundrum, “an own goal,” he said.

Economists at Nationwide, a financial firm, expect the inflation rate to peak sometime this summer at around 4.5 percent, more than double the Federal Reserve’s 2 percent target. And because the main measure of economic growth — gross domestic product — is adjusted for inflation, rising fuel costs are expected to weigh on overall growth in the coming months.

Most forecasters still expect the U.S. economy to avoid recession this year. Yet a divergence in wage gains over the past year is worsening the country’s internal financial divides, and may be part of why consumer sentiment among the bottom third of income earners has been so sour. Researchers at Bank of America noted in April that higher‑income households had experienced wage growth of 5.6 percent annually, compared with 1 percent to 2 percent growth for lower‑ and middle‑income households — the widest gap since 2015.

A substantial factor in the U.S. economy’s powering past the global commodity shock in 2022 was the underlying strength of the labor market. Wage growth among rank-and-file workers was so strong that the Fed was actively trying to tamp it down by slowing the economy. Hundreds of thousands of jobs were being added on average every month, driving up overall household income.

Even though unemployment remains low, the current employment situation stands in stark contrast to 2022, with wage growth substantially weaker and hiring at a pace more analogous to the jobs marketthat followed the Great Recession. The bottom 50 percent of wage earners are more vulnerable to a shock.

Research from Barclays, an investment bank, noted that demand for gasoline had become subdued in recent weeks, a signal that households may be avoiding lengthier drives or discretionary trips, even as peak summer driving season approaches.

The Federal Reserve Bank of Dallas projects that if the Strait of Hormuz remains closed through September, the cost of a barrel of crude could top $167, translating to at least $5 a gallon and levels of energy inflation that could threaten a recession.

Tay Parra, 19, works as a gas station attendant in Midland, Texas. He says that although high energy prices have been good for the oil industry in the area, his usual customers are already feeling the pinchfrom higher gas prices, even though it has not been as severe as on the West Coast.

“It’s starting to hit this past week or so,” Mr. Parra said. “I would say it’s cutting down on weekend trips mostly — people are not going out as much as they used to. It’s just mostly work, work, work, work, or to go see their family, and that’s probably about it.”

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