US consumer spending rose slightly more than expected in August but inflation also ticked up, with further cost pressures likely to come
Energy costs tied to the Middle East conflict remain a major driver of inflation, but the April report showed increases across housing, groceries, household goods, jewelry, footwear, and services.

While the stalemate in the Iran war continues and the Strait of Hormuz remains closed, soaring energy costs are taking over most headlines. However, prices are increasing in other sectors as well.

According to the Bureau of Labor Statistics, the consumer price index rose 0.6% in April compared to March, pushing annual inflation to 3.8%, its highest level in nearly three years.

"Consumers are doing their best to absorb higher energy costs, but they're not finding much relief elsewhere," Bret Kenwell, U.S. investment analyst at eToro, told CNBC. "Inflation pressure isn't just at the pump, it's showing up across the household budget."

The report was published days after the University of Michigan's preliminary consumer sentiment reading fell to a record low, with higher oil prices weighing heavily on confidence. That sentiment is now also visible in the CPI categories that shape everyday life, from rent to groceries.

Shelter inflation rose 0.6% in April and 3.3% from a year earlier. Lodging away from home jumped 2.4% for the month, while tenant and household insurance rose 7.2% annually. Housing costs remain one of the most stubborn forces in inflation, especially after economists raised concerns that last year's government shutdown disrupted some rent-related data collection.

Food prices also saw a sharp increase. Food at home rose 0.7% in April, the largest monthly increase since August 2022, and is now 2.9% higher than a year ago. Ground beef jumped 2.7% in one month and 14.5% annually as cattle prices climbed. Frankfurters rose 5.8% in April and 10.7% over the year, just as Americans head into summer grilling season.

Some increases were especially sharp. Tomato prices surged 15.1% in April and are up 39.7% from a year earlier, a jump CNBC noted comes as many tomatoes are imported and exposed to President Donald Trump's tariffs. Coffee rose 2% in April and 18.5% annually amid supply concerns.

The squeeze also reached household goods with window coverings up 8.2% from a year earlier. Dishes and flatware climbed 1.6% in April and 15.4% annually. Jewelry prices rose 3.7% last month and 16.1% over the year, while watches are 8.8% more expensive than in April 2025.

Services offered little relief as video and video game rentals and subscriptions cost 16.6% more than a year ago after rising 2.1% in April. Delivery services jumped 4.3% for the month and are now 13.6% more expensive on a 12-month basis.

However, smartphone prices rose 1% in April but remain 12.4% lower than a year ago. Used car and truck prices were flat for the month and down 2.7% annually. Men's outerwear, including suits and sport coats, fell 2% in April and is 7.1% cheaper than a year earlier.

Originally published on IBTimes