By
Temitope Olatunji
April 19th, 2024
Since December 1981, the US has not registered an inflation increase of as much as 8.5% in 12 months.
The US March Consumer Prices Index report that global investors have been waiting for is here, and everywhere is hot. On the 12th of April, data released by the Labor Department shows that the Consumer Price Index has increased 8.5% year-over-year. In the report, the Labor Department did a breakdown of the Consumer Price Index for March 2022. In March, the Consumer Price Index for All Urban Consumers (CPI-U) jumped 1.2% on a seasonally adjusted basis. This came after an initial gain of 0.8% in February. Also, the report stated that the 8.5% increase is before seasonal adjustment.
The US March Consumer Price Index
The rise in food, gas, and shelter indexes was the most significant contributor to the general hike. More than 50% of the all items increase in the month came from just gasoline. The gasoline index for March surged by 18.3%. While the food index gained 1%, the food at home index is up 1.5%. More report on the US March Consumer Price Index reveals:
“The index for all items less food and energy rose 0.3 percent in March following a 0.5-percent increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of other indexes also contributing, including those for airline fares, household furnishing and operations, medical care, and motor vehicle insurance. In contrast, the index for used cars and trucks fell 3.8 percent over the month.”
The recent increases and gains appear to be the highest recorded in years. Since December 1981, the US has not registered an inflation increase of as much as 8.5% in 12 months. Also, the all items less food and energy index advanced 6.5%, representing the highest 12-months spike since August 1982. In addition, the previous record high in 12 months on the Food index was in the one year ending May 1981. However, the latest report indicates the latest record high of 8.8%.
Inflation on the Rise
The March Consumer Price Index increase indicates inflation as consumers’ prices for everyday items surged to their highest levels since 1981. As a matter of fact, the percentage exceeds the Dow Jones estimate of 8.4%. Although worker wages are up 5.6% from the previous year, they may not be able to maintain their cost of living. When paychecks do not meet the living costs, inflation pressures will intensify. A separate report from the Bureau of Labour Statistics explains that real average earnings per hour posted a seasonally adjusted 0.8% loss for the month.
To tackle inflation, the Fed has started raising inflation rates. The White House was already preparing for the CPI data. Press secretary Jen Psaki earlier blamed Russia and Vladimir Putin for the inflation pressures.