A key inflation gauge closely followed by the Federal Reserve jumped to its highest level in almost three years as oil prices spike and impact the cost of living in the U.S.
Year-to-year prices rose by 3.5% in March, the Commerce Department said on Thursday. Compared to last month, prices rose 0.7%.
The impact of oil prices played an outsized role: gas prices rose over 20% compared to the previous month.
Once excluding the volatile component, along with food, core inflation rose by 0.3% compared to the prior month. The inter-annual rate stood at 3.2%, above February's reading of 3%.
The development adds to concerns about the cost of living, which have spiked further as a result of the war.
A recent survey showed that affordability remains the single biggest financial concern for households across the country.
A Gallup poll conducted between April 1 and April 15 among U.S. adults, showed that 31% of respondents identified inflation and high prices as the most important financial problem facing their families. Although lower than the 41% peak recorded in 2024, the figure remains among the highest seen in over two decades.
The survey, which captured a broad national sample, highlights how rising costs across essential categories continue to dominate financial anxieties. Energy costs in particular have emerged as a growing worry, with 13% of participants citing them, up by 10 percentage points from last year and the highest level since 2008. The results were published before the latest Commerce Department repor.t
Housing costs were mentioned by an equal 13%, while healthcare expenses stood at 8%, broadly in line with trends seen since 2020.
Overall, affordability-related concerns, including inflation, housing, healthcare, transportation, childcare and education costs, far outweighed all other financial issues cited in the survey.
Other economic factors trailed significantly. Taxes were mentioned by 6% of respondents, while 2% pointed to the broader economy, stock market or interest rates. Concerns related to Social Security were cited by just 1%.
Income-related challenges also featured, with 7% of respondents pointing to low wages or lack of money, and 4% citing unemployment or job loss. Meanwhile, 6% flagged general debt as their main issue, and 1% specifically pointed to credit card debt. Concerns around savings were relatively limited, with 3% worried about retirement savings and 2% about overall savings.
Notably, the survey reflects a worsening outlook among Americans about their financial future. A record 55% said their financial situation is getting worse, compared with 53% last year and 47% in 2024. This marks the fifth consecutive year that more Americans report declining finances than improving ones, a pattern last observed during the Great Recession.
