Inflation Hits 3.8% as Families Struggle at the Grocery Store and Gas Pump

New government data released Tuesday shows inflation reached 3.8% in April, the highest level in nearly three years. The Consumer Price Index, which tracks how fast prices are rising across the economy, is being driven largely by a surge in energy costs tied to the war with Iran.

Oil prices are up roughly 70% since January, pushing the average price of a gallon of gasoline to $4.50. That pain is showing up everywhere, from the pump to the grocery store, and the families absorbing it are finding their paychecks stretching thinner by the month.

Perhaps most concerning is that wages are no longer keeping pace. In November, wages were growing at about 4%, comfortably ahead of inflation. That figure has since slipped to 3.6%, two tenths of a point below the current rate of rising prices, meaning many workers are effectively taking a pay cut without anyone changing their salary.

Economists say relief depends heavily on the Strait of Hormuz, the critical waterway disrupted by the Iran conflict. Cal Poly Pomona economist Carsten Lange says even if the strait reopens, oil takes four to six weeks to reach its destination, meaning price relief at the pump wouldn't come immediately.