Mashadipati: US consumer prices surge

After today’s inflation report, Bloomberg Businessweek senior writer Stacey Vanek Smith writes that economists and consumers can finally agree on something. Plus: The US financial industry is worried about Anthropic’s new AI model, and Elon Musk is pushing for a change to Black ownership rules in South Africa.

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When it comes to inflation, economists and the rest of us live in very different worlds. But those worlds collided with the release of the consumer price index for March, out this morning from the Bureau of Labor Statistics. It’s the first comprehensive view of what’s happened to prices since the US attack on Iran, and the numbers are eye-popping: Prices across the US economy shot up 0.9% from the previous month—the biggest monthly increase since 2022—and 3.3% from a year ago.

“It’s going to freak people out, because that’s just a huge jump,” says Gbenga Agilore, chief economist at the Center on Budget and Policy Priorities. Typically, Agilore says, economists tend to focus on so-called core inflation, a measure that strips out food and energy prices. Food and energy tend to be more volatile and can distract from broader inflationary trends. (That was very much the case in March, which saw gas prices soar 20% from the same month last year, a leap that accounted for three-quarters of the advance in the overall index.)

SALT LAKE CITY, UTAH - APRIL 09: A worker fuels a Delta Airlines plane at Salt Lake City International Airport on April 09, 2026 in Salt Lake City, Utah. As fuel prices continue to rise amid war in Iran, airlines around the world are canceling flights and scaling back routes due to jet fuel shortages and surging prices that are straining operations and driving up costs. Photographer: Justin Sullivan/Getty Images — A Delta jet gets refueled in Salt Lake City on Thursday.

Consumers, though, tend to be hard-core anti-core-inflation-watchers, meaning they are laser-focused on food and gas prices. After all, unlike “men’s shirts and sweaters” (up 2% from last year) and “smartphones” (down 1%), eating or gassing up the car are things most of us don’t have a choice about. The price of eggs and heating oil and gasoline might obscure longer-term inflationary trends, but they also tend to make people angry and can swing the elections that ultimately dictate economic policy.

Core inflation in March looked relatively tame: up 2.6% from this time last year (versus 2.4% in February). Yet with the latest data release, even economists zeroed in on the headline figure. One reason is time: The conflict with Iran is nearing the two-month mark, and it’s clear that higher gasoline prices aren’t just a hiccup. “I was hoping for the US to win this war quickly,” says John Cochrane, senior fellow at Stanford University’s Hoover Institution, “but the long-term threat at the Strait of Hormuz is not good. Let’s hope we get sane policy responses.” Meanwhile, businesses are starting to pass higher fuel costs onto consumers, Agilore says, which means it’s only a matter of time before higher energy starts to bleed through to other CPI categories, such as services. “We have fuel surcharges being added by airlines, Amazon, UPS,” he says. “It’s raising prices everywhere.”

Find out what future risks to inflation lie ahead.

In Brief

Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell summoned Wall Street leaders to an urgent meeting on concerns that Anthropic’s latest AI model will usher in an era of greater cyber risk.
The Justice Department has been making errors in court, at a time of growing judicial mistrust, the fallout from President Donald Trump’s effort to reshape the agency to pursue his agenda.

On the Podcast

This week on Everybody’s Business, hosts Max Chafkin and Stacey Vanek Smith take stock of the US-Israel war on Iran and its economic and political consequences. Plus: taxes, AI and why a bag of Doritos might be the canary in the US consumer coal mine.

Listen and subscribe on Apple, Spotify, iHeart and the Bloomberg Terminal.

Déjà Vu

A woman holds a poster mocking US President Donald Trump while others hold portraits of Iran’s slain supreme leader Ayatollah Ali Khamenei and his son and successor Mojtaba Khamenei during a rally to commemorate his death in Tehran on April 9, 2026. Photo: AFP/Getty Images — A rally in Tehran on April 9.

After more than a month of bellicose rhetoric and escalating ultimatums from President Donald Trump, culminating with his threat to bomb Iran “back to the Stone Ages,” the results are in. He managed to wind the clock back by about six weeks.

When the two sides meet in Islamabad on Saturday, they will face the same litany of disagreements they failed to resolve in the February negotiations preceding the war—as well as new, thornier ones. If Trump had expected his bombs to make Iran regret not taking a deal back then, the plan appears to have backfired. Tehran has suffered thousands of casualties, but its conditions for peace are even more maximalist than before. It wants lasting control over the Strait of Hormuz, all primary and secondary sanctions lifted, US forces to withdraw from the region and financial compensation for the damage it’s incurred during the war.

Read Patrick Sykes on how the new US-Iran talks look a lot like the old ones.

Wildfire Impact

20%

That’s how much higher Californian utility bills are because of wildfires. The escalating cost of the fires adds $41 to the average monthly power bill for residential customers of California’s largest utility, accounting for 19% of the average Pacific Gas & Electric Corp. bill.

Steamrolling the Rules

Global telecommunication companies operating in South Africa do so through partnerships with local businesses that are partly owned by Black citizens. That’s to comply with equality rules that were instituted after the end of apartheid. SpaceX has spent the past year trying to get those rules changed.

The company, which is seeking to offer its Starlink satellite internet service in South Africa, has been lobbying policymakers on the country’s Broad-Based Black Economic Empowerment (B-BBEE) rules, which require communications businesses to maintain at least 30% local Black ownership. Elon Musk has described the rules as “openly racist” and last year took his complaints to his social media platform, X: “Starlink is not allowed to operate in South Africa, because I’m not black.” This has made him a target of fury among people in his birth country, but it also appears to be working.

Read Rivaldo Jantjies on Elon Musk’s steamrolling of racial equality rules in South Africa.

Boxed In

“This started as a war Israel wanted, but it’s taken on a life of its own.”

Shira Efron

A former Israeli government adviser who is now at RAND Corp.

With Israel continuing to strike Lebanon and Iran leveraging the Strait of Hormuz, the same political fault lines that helped shape the conflict are putting the shaky ceasefire deal at risk.

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US consumer prices surge