Gas Price Surge Drives U.S. Inflation to a Fresh 40-Year High of 8.5%
2022.04.12 15:47
By Geoffrey Smith
Investing.com — U.S. inflation hit a new 40-year high of 8.5% in March, as sharp rises in prices for gasoline, housing and food all heaped pressure on the Federal Reserve to tighten monetary policy.
The consumer price index rose 1.2% on the month, in line with analysts’ expectations, over half of which was accounted for by an 18.3% increase in gasoline prices. Pump prices hit all-time highs last month, according to the Automobile Association of America and have only partly receded in the last month as the Biden administration released millions of barrels from the U.S. Strategic Petroleum Reserve to bring prices down. The AAA’s average gas price stood at $4.09 a gallon on Monday, down from a peak of $4.33 a month ago.
Gas prices weren’t the only thing pushing inflation higher, however. Food costs rose another 1.0% for the second month in a row, and transportation services (which includes airfares) rose a seasonally-adjusted 2.0% on the month.
There was a glimmer of light on the horizon, in as much as core prices – which strip out volatile food and energy costs – rose only 0.3%, a little less than the expected 0.5%. The annual core rate of inflation consequently rose only to 6.5%, rather than the 6.6% expected.
