U.S. consumers faced rising prices in March as oil costs surged due to the Iran war, pushing inflation higher, according to the U.S. Department of Commerce.

Core inflation rose to 3.2%, its highest level since late 2023, while overall inflation reached 3.5%, driven largely by energy prices.

The economy grew at a modest 2% annualized rate in the first quarter, slightly below expectations despite strong investment in areas like AI.

Jobless claims fell to a generational low, showing continued labor market strength even as hiring remains slow, CNBC has reported.

Overall, the data show a “split economy,” with strong investment and employment but rising inflation and pressure on consumers.