Inflation in the United States continued to be a problem in March. According to data released Tuesday by the Bureau of Labor Statistics, prices have continued to rise, reaching a new 40-year high.
For the year ending in March, the Consumer Price Index increased by 8.5 percent, unadjusted for seasonal variations. That was higher than February’s elevated reading of 7.9%, and it was the highest level since December 1981, when the CPI was 8.9%.
The March figure on Tuesday was also somewhat higher than the 8.4 percent forecast by economists. The majority of the increase in March was due to an increase in gasoline and food prices, which surged as the Ukraine war threw global commodity markets for a loop, as well as an increase in housing costs.Gas prices in the United States increased by more than 18% in only one month. Gas prices have risen by 48 percent year over year. Prices jumped 6.5 percent in the 12-month period ending in March, the largest increase since August 1982, when the more volatile food and energy categories were excluded.
Over the last year, energy expenses have increased by 32%, while food expenditures have increased by 8.8%. It was the most significant rise in food prices since May 1981.
As far as the eye can see, there is price pressure.
Even though the more volatile products contributed so much to last month’s price increases, Joe Brusuelas, chief economist at RSM US, said Tuesday’s statistics illustrate that inflationary pressures are widespread across the economy.
“Yes, inflation may soon reach a nadir. That does not, however, suggest that major relief is on the way in the near future “he stated Policymakers in Washington, D.C., are concerned about the impact of rising prices on American households, and properly so.
In a consumer poll conducted by the Federal Reserve Bank of New York, inflation forecasts for the coming year reached their highest level since the survey’s commencement.
“Price shocks are still reverberating throughout the US economy.
Given the battle in Eastern Europe and the chance that the European Union could choose to cut off natural gas and oil supplies from Russia… the risk of subsequent oil and energy shocks would further roil global oil prices “In a note to clients, Brusuelas wrote.
To bring inflation under control, the Fed has begun to tighten monetary policy by halting the pandemic stimulus programme and hiking interest rates. However, monetary policy instruments are blunt and take time to become effective, so it will be some time before consumers can breathe a sigh of relief.
With seasonal adjustments, consumer prices jumped 1.2 percent in March, the largest increase since September 2005. Prices grew 0.3 percent excluding food and energy, which is less than in February, highlighting how important commodity prices are in the current inflation spike.
Airline tickets, furniture, medical treatment, and auto insurance have all gone up in price.
In emailed comments, Brian Coulton, chief economist at ratings firm Fitch, said, “The good news here is that core inflation declined on a month-over-month basis.” He noted that reducing car prices are to blame for the majority of the reduction.