The rise in prices was led by gasoline, up 21.2% in March. While the prices for consumer goods and services other than food and energy, or the so-called “core inflation rate” only ticked up 0.2% in March, the rise in fuel prices started to spill over into other goods and services. Airline fares, where jet fuel is a major cost, rose 2.7% in the month of March, and 14.9% from a year earlier.

This increase in prices and the rate of inflation follows the U.S.-Israeli war on Iran, launched in the last days of February. In response to the massive U.S.-Israeli bombings, with well over 10,000 targets, Iran has retaliated against U.S. bases and businesses in the Persian Gulf and Israel itself. In addition, Iran has taken control of the Straits of Hormuz, through which flowed about 30% of the world’s exported oil, and large amounts of natural gas, urea (used to make fertilizer), and helium, used in chip manufacturing and other high-tech goods like MRI machines.

With a relative ceasefire, Trump administration negotiators led by Vice President Vance are meeting with Iranian representatives for talks hosted by Pakistan. The flow of oil, fuels and chemicals is still just a trickle, mainly ships holding Iranian oil, which now fetch almost twice as much as before the war started because of the rise in the price of oil and the fact that the Trump administration lifted sanctions on their oil. Even though oil futures have dropped back down below $100 a barrel, this is still 50% higher than their pre-war prices. The purchase price of actual, or physical oil, is another $30 a barrel higher. Even worse, with the last shiploads of oil that made it out of the Persian Gulf unloading their oil at their destinations, the soaring price of oil will soon become a physical shortage of oil in more countries.

Not surprisingly, this surge in prices weighed on consumers’ confidence. The University of Michigan’s Sentiment Index fell to a record low of 47.6. This is the lowest in the survey’s 74-year history, lower than the 2008 financial crisis and the oil-price shock of 1979 after the revolution in Iran that ended the reign of the U.S.-backed Shah of Iran and the beginning of today’s Islamic Republic.

With prices soaring, more and more Americans who were living paycheck to paycheck are falling behind. One of the businesses benefitting from hard times are pawn shops, which reported more business in March. There are now corporate chains of pawn shops, whose stocks are at multi-year highs, in effect profiting from economic problems.

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San José, CA – The price of regular gasoline has soared a dollar a gallon on average since Trump ordered this country to war with Iran. According to the American Automobile Association or AAA, the average price has gone from $2.96 a gallon a month ago to $3.98 gallon on March 24, or more than 34%.

How high could they go? No one really knows, but according to my “Trump secretly loves California” theory, since Trump has brought the national price of gas closer where the California price was before the war started ($4.63), it is quite possible that $5 a gallon gasoline could be seen in gas stations across the country in the near future.

But gasoline prices are just the visible “tip of the iceberg” for consumer price inflation. Diesel prices are up 43% since the start of the war, even more in percentage terms than gasoline, and are now more than $5.35 a gallon on average nationwide. While very few individuals have cars that run on diesel, most trucks and farm equipment use diesel fuel. The rise in diesel prices will further squeeze smaller farmers and truckers, while the increase in costs will be showing up in food prices and the prices of almost all goods which are shipped to markets.

The cost of urea, the basic building block for nitrogen fertilizers, is also up 45% since the war started. Part of this is because the in response to the U.S.-Israeli attack and bombing campaign, most the major exporters of urea are either directly affected by the war (Saudi Arabia and Oman), or indirectly, as they (Egypt, China, Malaysia and Indonesia) import the natural and petroleum gas used in urea production from the Mideast. This will squeeze farmers even more, and some of the costs will pass through to higher food prices.

Finally, Qatar is a major producer and exporter of helium, which is a by-product of natural gas production. Helium is used in the production of MRI machines, production of semiconductors, and other industrial uses. Helium prices up 70 to 100%, will likely lead to shortages, depending on how long the war lasts.

While Trump has been saying from the start of the war, more than three weeks ago, that the war is almost over, the fact of the matter is that more than 5000 U.S. troops, both Marines and Army, are on the way to the Middle East, signaling another escalation of the war, with U.S. boots on the ground.

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While this inflation measure was lower than economists expected, the report should be taken with a large grain of salt. One of the reasons that inflation came in lower than expected is that it reported that there was basically no change in housing costs between September and November. Housing costs, including rents and estimated costs of home ownership, make up over a third of the CPI. This flatlining of housing costs typically only happens during a recession, and more likely reflected problems with the statistical methods used for this report.

One change that would also lower the inflation rate is that the Bureau of Labor Statistics, or BLS, that collects the data for the inflation report, removed the cost of long-term care insurance from the index. With premiums reported to have gone up 24% on average in 2024, this would tend to lower the index.

The report as a whole had a very large number of blank entries, partly because the October data wasn’t available. While inflation rates for specific goods were reported, other services – such as gardening and lawn care, which has many immigrant workers and was up 13.9% year over year in September – were not reported. One service that was reported that also has many immigrant workers was elder care, up 10.8%, possibly reflecting Trump mass deportation efforts that are hitting occupations with many immigrant workers.

Another under-reported service was insurance, including car insurance. Health insurance premiums were reported to be up only 0.6% in November, year over year, while in September they were up 4.2% from a year earlier, suggesting that these insurance premiums went down in October and November – something that virtually no one is seeing.

Last but not least, while many specific goods were down in price, such as eggs, many others were still rising at double digit rates. Beef was up 15.8%, while coffee was up even more, with prices 18.8% higher than a year ago. Home energy prices were up 6.9% from a year ago, even faster than in September, where the year over year rise was 5.1%. This was in part due to the artificial intelligence data centers being built, which require massive amounts of electricity, with more of it coming from new or reactivated nuclear power plants, which are the most expensive way to make electricity in the United States.

Finally, because of late start, with data collection only beginning mid-month, at the end of the government partial shutdown, this report included Black Friday sales, unlike normal November inflation reports, which would have pulled down prices reported and lowered the inflation rate.

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The day after Trump announced tariffs on Canada and Mexico, on February 1, a Canadian utility with U.S. customers announced that their rates would be rising with the new tariffs. Outdoing this was Nucor, the largest producer of steel in the United States, which has raised the price of its steel four times since January. The company plans to get ahead of Trump’s planned 25% tariffs on aluminum and steel, which are to take affect March 12, even though their steel in made in the United States and not subject to tariffs. They are using the same playbook as in 2018, during the first Trump administration. When Trump put 25% tariffs on imports of steel, domestic steel producers raised their prices an average of 22%, boosting profits but not production.

Last but not least, the price of gasoline is about to begin its seasonal rise. On average, the price of gas hits a low in February, and then starts to rise during the spring and summer. While this is not the fault of any of Trump’s policies, it certainly goes against his pledge to bring down the price of gasoline.

Candidate Trump pledged to bring down prices as president. This was a big part of his victory last November, as voters turned away from the Democratic Party candidates, who were deaf to working people’s complaints about inflation. But like a true politician, Trump is turning away from this goal and actually acting to make it worse with reciprocal tariffs on all countries to go into effect in April.

Treasury Secretary Scott Bessent, one of some 13 billionaires helping billionaire Trump to manage the federal government, recently said, with a smiling face, that Trump’s actions were “disinflationary.” What he meant by this is that Trump’s DOGE chief, Elon Musk was taking an axe to federal payrolls, cutting or putting on leave some 30,000 and threatening 2 million others with layoffs.

The spreading uncertainty and pain is already reducing spending, which will tend to limit price rises at the cost of disrupting the lives of tens of thousands of civil servants. Trump is stripping away the mask from the time when two-faced politicians used to assure the people while carrying out the wishes of billionaires. But now with the billionaires in charge, there is no more pretense, so they smile while wielding a chainsaw to our jobs and pocketbook.

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The S&P Purchasing Managers Index fell in February to 51.6, just above the 50.0 line where the economy is neither growing nor shrinking. The services part of the index actually dropped below 50, to 49.7, showing that the service sector was starting to slow. The “Trump Bump” of economic and financial enthusiasm has ended after just a month in office, as concern rose among businesses about the impact of his tariffs and deportations.

A separate report, on the sale of existing homes by the National Association of Realtors, saw sales fall by almost 5% in January, as compared to December of 2024. Interest rates have been rising. Trump’s proposed tariffs have led to greater expectations of higher inflation. Mortgage interest rates topped 7% in January, making home loans more expensive to