The Bureau of Labor Statistics reported Tuesday that consumer prices rose at an annual rate of 8.5% in March, well above expectations, as the war in Ukraine fueled massive energy costs, adding pain to the consumer pocketbook.
The reading exceeded the predicted 8.4% increase and was the highest since the end of 1981. For the month, prices rose 1.2% after a 0.8% increase in February.
March inflation numbers were the first to capture the full rise in petrol prices after Russia’s invasion of Ukraine on February 24.
Rising energy prices have led to higher transportation costs for the shipment of goods and components in the economy, which in turn has contributed to higher prices for consumers.
While it is possible to ask households to ignore rising prices at petrol pumps and grocery stores, the Federal Reserve tends to focus more on core inflation when setting policy, as it is less volatile. On a month-on-month basis, core inflation has fallen to its lowest level since September.
Across the economy, the year-over-year price spikes were widespread. Gasoline prices have risen 48% in the past 12 months. Prices for used cars have increased by 35%, although they actually fell in February and March. Bedroom furniture increased by 14.7%, men’s suits and coats by 14.5%. Grocery prices increased by 10%, including an 18% increase for both bacon and oranges.
The March inflation data is the first to capture the full impact of the European war, which has hit the U.S. since 2008. Has sent gas prices to the highest level. Food prices are also up 8.8% during the year and up 1% in the month. The largest increases were in cereals and bakery products (10%), poultry, fish and meat (13.8%), fresh fruits and vegetables (8.1%), and eggs (11.2%).
It also said that food prices had increased by 8.8% in the same period. Like energy, food price inflation has been exacerbated by Russia’s invasion of Ukraine. Both countries are large exporters of widely used goods such as wheat and sunflower oil.
US crude futures rose to a ten-year high of $123.70 a barrel last month in the wake of an immediate threat from Moscow’s invasion and sanctions on energy exports, while wheat and other food prices damaged crops and the conflict-linked grain restrictions. The report jumped on. , “We expect a large gap between core and headline inflation … reflecting the global disruption in energy and food markets,” Psaki told reporters in Washington.
