An inflation report to be released on Wednesday will provide the latest measure of price increases as the U.S.-Israeli war with Iran drives up gasoline costs and renews concerns about affordability.
The fresh data — which is set to detail prices in February — will show the cost burden borne by households weeks before the outbreak of war.
Economists expect prices to have increased 2.4% in February from a year earlier, which would leave the inflation rate unchanged from January. Inflation stands slightly higher than the Federal Reserve’s target rate of 2%.
A lackluster jobs report last week showed the U.S. economy lost 92,000 jobs in February, which marked a reversal of fortunes for the labor market and erased most of the job gains recorded in 2026.
The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.
Sluggish hiring has coincided with elevated inflation, threatening a period of “stagflation.”
Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.
U.S. crude oil prices hovered at about $86 per barrel on Tuesday, surging more than 30% since a month earlier.
The average price of a gallon of gasoline in the U.S. soared to $3.53 on Tuesday from $2.92 a month prior, AAA data showed.
President Donald Trump speaks at the Republican Members Issues Conference, March 9, 2026, at Trump National Doral Miami in Doral, Fla.
Mark Schiefelbein/AP
Still, the overall economic picture remains mixed.
A government report in February on gross domestic product (GDP) showed the economy grew at a tepid annualized pace of 1.4% over the final three months of 2025. That reading indicated a dramatic cooldown from the strong annualized growth of 4.4% recorded in the previous quarter, U.S. Commerce Department data showed.
The Iran war threatens to slow U.S. economic growth since oil-driven price increases could weigh on consumers and businesses, analysts previously told ABC News.
The potential combination of higher inflation and slower growth could also pose a challenge for the Fed, putting pressure on both sides of its dual mandate to manage prices and maintain maximum employment.
If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but risks a cooldown of economic performance.
The central bank held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts. Policymakers will make their next interest-rate decision on March 18.
