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• Gasoline prices in March jumped 18.3% since Feb and 43% compared to a year earlier
US consumer prices soared in March to their highest levels in more than 40 years, with costs for food, fuel, housing, and other necessities wiping out the pay raises that Americans have received.
On Tuesday, the Labor Department said that its consumer price index (CPI) jumped 8.5% compared to a year earlier, the biggest year-over-year increase since December 1981.
Dow Jones estimated the inflation index to be around 8.4%.
Bottlenecked supply chains, robust consumer demand, and worldwide disruptions in food and energy markets worsened by the Russia-Ukraine crisis have driven the price up.
The price rises have not been seen in the US since the stagflation days of the late 1970s and early ’80s.
Excluding the already high food and energy prices, the so-called core CPI rose 6.5% in a year. However, there were signs that core inflation appeared to be ebbing, as it increased just 0.3% for the month, less than the 0.5% estimate.
Energy prices were 32% over the year, as gasoline prices popped 18.3% for the month and 43% compared to a year earlier, boosted by the geopolitical crisis and the pressure the war is exerting on supply.
Prices of food rose 1% for the month and nearly 9% over the year, as prices for goods such as rice, ground beef, citrus fruits and fresh vegetables all posted gains of more than 2% in March.
The increase in gas prices has led to higher transportation costs for the shipment of goods and components across the economy, which, in turn, has contributed to higher prices for consumers.
The accelerating prices suggest that the Fed may raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation. The financial markets now foresee steeper rate hikes this year than Fed officials signaled last month.
Picture Credit: AP
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