U.S. inflation, already at a 40-year high, accelerated last month at the fastest rate since the early 1980s.
According to Bureau of Labor Statistics data released Wednesday, the consumer price index for March rose some 8.5% from last year, up from the 7.9% pace it set in February. It’s the fastest rate since December 1981.
Among the factors driving up prices: supply chain issues, heavy consumer demand and disruptions to food and energy supplies made worse by Russia’s invasion of Ukraine, experts are saying.
The Associated Press reported that March inflation numbers were the first to fully capture the surge in gas prices following Russia’s Feb. 24 invasion of Ukraine. According to AAA, the average price of gas — $4.10 per gallon – is up 43 from a year ago, the AP reported.
The escalation of energy prices has led to higher transportation costs for the shipment of goods and components across the economy, which, in turn, has contributed to higher prices for consumers, the AP reported.
The Federal Reserve is expected to react by raising interest rates aggressively in the coming months, possibly higher than the Fed had indicated last month.
The news was apparently expected. White House Press Secretary Jen Psaki said late Monday to expect an “extraordinarily elevated” inflation level from last month’s reading, thanks in part to the impact on food and energy prices from Russia’s war on Ukraine.
TheStreet.com reported Tuesday that U.S. crude futures hit a 10-year high of $123.70 per barrel last month following Moscow’s invasion and the threat of sanctions on energy exports. Wheat and other food prices also leaped on reports of damaged crops and grain embargoes linked to the conflict, the site reported.
“We expect a large difference between core and headline inflation … reflecting the global disruptions in energy and food markets,” Psaki told reporters in Washington, according to the AP.