A key inflation gauge accelerated in April to the highest level in three years, the latest sign that spiking gas prices and higher food costs are squeezing Americans’ finances.

Inflation jumped to 3.8 per cent in April compared with a year ago, the Commerce Department said on Thursday, up from 3.5 per cent in March and the highest since May 2023. On a monthly basis, prices rose 0.4 per cent, down from the 0.7 per cent jump in March.

The report showed that prices have risen for many items in addition to petrol, indicating that inflation could persist and pose problems for congressional Republicans in this year’s midterm elections. Inflation is also notably above the Federal Reserve’s target of 2 per cent, which means Fed policymakers may decide to forego any cuts to their key short-term interest rate this year. Some officials have signalled that their next move could be a hike rather than a cut.

Excluding the volatile food and energy categories, core inflation rose to 3.3 per cent in April from 3.2 per cent the previous month. It is the highest core figure since November 2023. One positive sign in the report: core prices rose just 0.2 per cent in April from March.

Higher prices are also cutting into consumers’ incomes, which were unchanged in April from March. Adjusted for inflation, incomes actually slipped 0.1 per cent last month.