Politics

Inflation Surges 8.5% In March, Hitting A New 40-Year High

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Inflation accelerated to a new four-decade high in March as supply chain constraints, the Russian war in Ukraine and strong consumer demand fueled rapid price gains that wiped out the benefits of rising wages for most Americans.

The Labor Department said Tuesday that the consumer price index – which measures a bevy of goods including gasoline, health care, groceries and rents – rose 8.5% in March from a year ago, the fastest pace since December 1981, when inflation hit 8.9%. Prices jumped 1.2% in the one-month period from February, the largest month-to-month jump since 2005.

Economists expected the index to show that prices surged 8.4% in March from the previous year and 1.2% on a monthly basis.

So-called core prices, which exclude more volatile measurements of food and energy, climbed 6.5% in March from the previous year – up from the 6.4% increase recorded in February. It was the steepest 12-month increase since August 1982.

Price increases were widespread: Energy prices rose a stunning 11% in March from the previous month, and are up 32% from last year. Gasoline, on average, costs 48% more than it did last year after rising 18.3% in March on a monthly basis as the Russian war in Ukraine fueled a rapid increase in oil prices.

The March inflation data is the first to capture the full effect of the European war, which sent gas prices in the U. S. to the highest since 2008.

Food prices have also climbed 8.8% higher over the year and 1% over the month, with the largest increases in cereal and bakery products (10%), poultry, fish and meat (13.8%), fresh fruits and vegetables (8.1%), and eggs (11.2%).

Used car and truck prices, which have been a major component of the inflation increase, are still up 35.3% from the previous year, but actually declined by 1.8% in the one-month period between February and March. Shelter costs are up 5% year over year and jumped 0.6% for the month.

The inflation spike has been bad news for President Biden, who has seen his approval rating tumble as consumer price… (Read more)

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