The American public generally attributes the recent resurgence of inflation to the energy price surge caused by the conflict between the United States and Iran. However, the latest official inflation data clearly shows that price increases have long since broken through the single energy category and spread to multiple areas of people's livelihoods, including housing, food, daily necessities, and life services.

US inflation data in April hit a near three-year high, putting pressure on household spending across the board. Prices for only a few categories saw a slight decline, and overall inflation showed a trend of spreading in multiple areas and rising across the board.

Inflation data rose sharply while consumer confidence continued to weaken.

The U.S. Bureau of Labor Statistics released inflation statistics on Tuesday (May 12). After seasonal adjustment, the U.S. Consumer Price Index rose 0.6% month-over-month in April, and the annualized inflation rate climbed to 3.8%, marking the strongest year-over-year increase in nearly three years.



Bret Kenwell, an investment analyst at eToro, said that people can only passively bear the pressure of rising energy costs, but cannot find room to reduce the burden in other living expenses. The impact of inflation is no longer limited to fuel consumption, but has permeated the entire household budget structure.

Prior to this inflation report, the University of Michigan had already released its preliminary consumer confidence reading, which hit a record low. Analysts believe that the tense situation in the Middle East, pushing up oil prices, is the core factor dragging down consumer confidence, and the latest CPI data further confirms that price pressures have spread to all sectors.

Housing sector inflation remains strong, and rents and related costs continue to rise.

The housing sector has become a major driver of inflation, with housing-related inflation rising 0.6% month-on-month in April and 3.3% year-on-year. Among them, the price of accommodation in other places rose sharply in April and the annual increase is considerable. Housing rental and family insurance costs have also steadily increased, and the annualized inflation rate remains high.

Since the US government shutdown last year caused a gap in economic data, economists have been closely monitoring housing inflation trends. Industry insiders worry that the core metric of landlord-equivalent rent has not been accurately recorded, making it difficult to truly reflect changes in housing rents. This could lead to discrepancies in overall inflation data, indicating that the implicit pressure of housing inflation has not yet been fully released.

Food prices have surged across the board, with fresh and imported products experiencing particularly dramatic increases.

Household food prices rose sharply in April, marking the largest monthly increase since August 2022, while also steadily rising year-on-year. Fresh meat prices surged, driven by beef cattle prices, with ground beef prices showing a significant increase this year. With the summer barbecue season approaching, processed meat products such as hot dogs also saw double-digit year-on-year price increases.

As a major agricultural product that the United States heavily relies on for imports, tomatoes have seen their prices soar due to tariff policies, with a significant monthly increase and a year-on-year increase of nearly 40%. Coupled with supply concerns stemming from global supply chain disruptions, coffee prices have also strengthened, with both monthly and annual increases remaining high, significantly increasing the burden of daily food expenses.

Prices of daily necessities and services are rising in succession.

Retail categories such as home décor, tableware, jewelry, watches, and footwear all saw price increases, with many sub-categories achieving double-digit year-on-year growth, putting pressure on consumption across the board, from household goods to apparel. Various lifestyle services also succumbed to inflation, with video game subscriptions and rentals, as well as food delivery service fees, rising both month-on-month and year-on-year, indicating a continued increase in service consumption costs.

Price declines in a few product categories are insufficient to offset overall inflationary pressures.

Amidst a general rise in prices across the board, only a small number of product categories saw their prices decline.

While smartphone prices rose slightly that month, they still saw a significant year-on-year decrease overall; used passenger car prices remained flat month-on-month but declined year-on-year; prices for men's formal wear and other apparel also fell. However, these price reductions covered a limited range of categories and could not offset the price increases in major sectors such as housing, food, and services, thus failing to alleviate the actual pressure of rising living costs for the public.

Summarize

Overall, the US-Iran tensions pushing up energy prices are only the surface reason for the rebound in US inflation. Current price increases have spread across multiple industries and product categories. Housing, daily necessities, food, consumer goods, and services are all under pressure; minor price reductions for niche products alone are insufficient to reverse the overall trend. The future inflation trajectory will not only be influenced by the geopolitical and energy situation but will also depend on domestic consumer demand, supply chain recovery, and monetary policy adjustments. The high cost of living for the public is expected to persist for a considerable period.