Unstoppable inflation reaches 8.5%
The increase in inflation in the last 12 months in the United States has been the highest in the last 40 years. The prices of food, gasoline and housing, among others, harass consumers and eliminate the salary increases that many people have received.
The Labor Department said on Tuesday that its consumer price index rose 8.5% in March from a year earlier, the highest annual increase since December 1981. The rise in prices is due to the strangulation of supply chains, high demand and disruptions to global food and energy markets aggravated by Russia’s war against Ukraine.
The government report also reveals that inflation increased 1.2% between February and March, compared to 0.8% from January to February.
The March figures are the first to fully capture the rise in gasoline prices following the Russian invasion of Ukraine, which began on February 24. The West has responded to Moscow’s brutal attacks, which have disrupted global food and energy markets, with sanctions on the Russian economy. According to the AAA automobile association, the average price of a gallon (3.8 liters) of gasoline has increased 43% to $4.10 from last year, although it has fallen in recent weeks.
Escalating fuel prices have driven food and component transportation costs up across the economy, translating into rising consumer prices.
The latest evidence of accelerating prices supports the expectation that the Federal Reserve will aggressively raise interest rates in the coming months to try to rein in lending and tame inflation. Financial markets are expecting much larger rate hikes than Fed officials had anticipated last month.