Consumer prices rose 8.5% in the year through March, reaching the fastest inflation rate in 41 years.
SO WHAT
Surging prices are causing hardship for a growing majority of Americans.
WHAT HAPPENED
The latest increase in the consumer price index outdid the 8.4% economists predicted, according to various estimates.
- Inflation rose 1.2% in March compared to February, above economists expectations of 1.1%.
- Food, fuel and shelter costs were the biggest reasons inflation was faster than in any year since 1981.
- Gasoline prices jumped 18.3% from February to March — as the Russia-Ukraine war disrupted global energy markets — accounting for over half the rise in monthly headline inflation.
Leaving aside fuel and food, prices climbed 6.5% in the year through March.
- The 0.3% increase in so-called core prices from February to March was less than the 0.5% economists feared.
- Prices for used cars and trucks fell 3.8% in March.
HOW BIDEN’S AMERICA IS COPING
President Biden’s White House on Monday tried to preemptively spin the dire inflation numbers as “Putin’s price hike,” pointing to Russia’s invasion of Ukraine.
- But as commentators noted, the inflation surge began last May, and the Ukraine war started this February.
Meanwhile, 83% of voters say they are experiencing hardship due to increased prices on everyday items, according to an Emerson College poll last month.
- Forty percent report significant hardship, and another 43% report some hardship.
- Polling has consistently shown that Americans are ready to punish Biden and the Democrats for inflation in the upcoming midterm elections.
WHAT’S NEXT
Some analysts have expressed hope that inflation is near a peak, noting:
- Gas prices have ticked down slightly since March 1.
- With federal stimulus aid having expired, consumers may buy fewer goods, like cars and appliances, easing pressure on overstretched supply chains.
- The Federal Reserve has signaled more interest rate hikes are coming.
OK, BUT: Wages have gone up sharply, though not as fast as inflation, which could push employers to raise their prices.
- Housing has continued to get more expensive.
- A coronavirus outbreak in China has led to brutal lockdowns and economic disruptions.
- The war in Ukraine has added to uncertainty about commodity prices and supply chains.
“The big run-up in gas and food and home prices has really caused great hardship for many households,” Richard Curtin, a veteran economist who runs the University of Michigan consumer survey, told Politico last week.
- “And the Biden administration made a critical error in saying it would be transient and people should just tough it out. It wasn’t transient. A lot of people couldn’t just tough it out. And it caused a big loss of confidence in [Biden’s] policies.”