U.S. inflation rose to 8.5 percent in the month of March, the highest since December 1981.
Gatekeepers News reports that the rise is driven by increasing energy and food costs, supply constraints and strong consumer demand, according to a report released on Tuesday by the Labor Department. Russia’s invasion of Ukraine, which resulted in sanctions from Western nations, is also adding another level of uncertainty.
The increase is up from 7.9% in February.
Prices rose 1.2% from their February level, the sharpest monthly increase since September 2005 and a sharp acceleration from the 0.8 per cent increase recorded in February.
Core prices, which exclude more volatile measurements of food and energy, climbed 6.5% in March from the previous year – up from the 6.4% increase recorded in February.
Energy prices rose a stunning 11% in March from the previous month, and are up 32% from last year. Gasoline, on average, costs 48% more than it did last year after rising 18.3% in March on a monthly basis as the Russian war in Ukraine fueled a rapid increase in oil prices.
Food prices have also climbed 8.8% higher over the year and 1% over the month, with the largest increases in cereal and bakery products (10%), poultry, fish and meat (13.8%), fresh fruits and vegetables (8.1%), and eggs (11.2%).
Used car and truck prices, which have been a major component of the inflation increase, are still up 35.3% from the previous year, but actually declined by 1.8% in the one-month period between February and March. Shelter costs are up 5% year over year and jumped 0.6% for the month.
Meanwhile, the rising inflation is badly affecting the wage gains that American workers have seen in recent months; real average hourly earnings decreased 0.8% in March from the previous month, as the 1.2% inflation increase eroded the 0.4% total wage gain, according to the Labor Department. On an annual basis, real earnings fell 2.7% in March.
