First modification:
In March, the rate of inflation was the highest since 1981, fueled by soaring energy, food and housing costs, and paves the way for an aggressive rate hike by the Federal Reserve.
The war came to the neighborhood. The Labor Department reported that its consumer price index rose 8.5% in March from the previous 12 months, driven by gridlock in supply chains, consumer demand and gains in global markets. of food and energy, aggravated by Russia’s war against Ukraine.
Month-on-month, inflation rose 1.2% from February to March, the biggest month-on-month jump since 2005, with gasoline driving the increase. The data, although alarming, was predictable. A Bloomberg survey predicted that the year-on-year increase would reach 8.4%, but reality exceeded them.
Among the most significant increases since a year ago are that of gasoline, which rose 48%, while used cars rose 35%, despite recent declines in February and March. Household furniture rose 14.7% and groceries 10%, including bacon and oranges, which showed increases of up to 18%.
For its part, so-called core inflation, which excludes food and energy prices, rose 0.3% from February to March, the smallest monthly rise since September, but overall, basic prices rose 6. 5%, the largest increase since 1982.
“The fire of inflation is still out of control,” said Christopher Rupkey, chief economist at research firm FWDBONDS LLC.
The Russian invasion of Ukraine, which triggered far-reaching Western sanctions against the Russian economy, is already disrupting food and energy markets, reflected for the first time in March inflation data. According to the AAA, the average price of a gallon of gasoline rose 43% compared to last year, although in the last two weeks it has been downward.
Food prices rose 8.8% in the last year, especially supermarket purchases, which increased 10%, while those of food in restaurants increased by 6.9%.
Some economists suggest that inflation is at or near its peak. Kathy Bostjancic, an economist at Oxford Economics, expects year-on-year inflation to hit 9% in May and then start “a slow decline”.
Consumer demand could fall once wages fall below inflation and households run out of savings and the Federal Reserve raises interest rates, a formula that would help contain inflation. Although this is something that could also take more time.
with AP
#Economy #Yearonyear #inflation #United #States #reaches #highest