Filed Under: Business

8.5% inflation sets new 40-year high. But here’s the good news.

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Consumer prices in March climbed to a new 4-decade high of 8.5%, according to a Labor Department report economists described as “nasty” and “ugly.” U.S. inflation was last this high in December 1981.

Just between February and March 2022, prices went up 1.2% across the board, a dramatic spike considering February’s inflation rate of 7.9% was also a 4-decade high.

The month’s massive surge is almost entirely driven by food and energy. Removing those two categories, consumer prices only rose 0.3% the month of March.

The gas index alone shot up 18.3% in one month, a staggering level mainly attributed to Russia’s war on Ukraine. The spike in gas accounted for more than half of the total monthly increase. Over the course of the year, gas is up 48%, according to data by the Bureau of Labor Statistics. Meanwhile, electricity is up 11.1% year over year and grocery prices rose 10% over the past year.

As nasty or ugly as this report is, economists see a silver lining. Many, including those at investment bank UBS, predict this is the inflation peak and forecast a steady decline in the inflation rate over the rest of the year.

SIMONE DEL ROSARIO: NASTY. UGLY. THESE ARE THE WORDS ECONOMISTS USED TO DESCRIBE THE LATEST INFLATION REPORT. AND THEY’RE RIGHT ON TARGET.

CONSUMER PRICES IN MARCH ROSE 8.5% COMPARED WITH A YEAR AGO. THAT’S THE HIGHEST INFLATION RATE IN MORE THAN 40 YEARS.

AND JUST BETWEEN FEBRUARY AND MARCH – PRICES WENT UP 1.2% ACROSS THE BOARD.
BUT CHECK THIS OUT. THE MONTH’S MASSIVE SPIKE IS ALMOST ENTIRELY DRIVEN BY FOOD AND ENERGY. TAKE THOSE AWAY, AND PRICES ONLY WENT UP 0.3% IN MARCH.
THE GAS INDEX ALONE SPIKED 18.3% IN ONE MONTH. BLAME RUSSIA’S WAR ON UKRAINE FOR THAT. OVER THE YEAR, GAS IS UP 48%.
AND YOU’RE PAYING A WHOPPING 10% MORE FOR GROCERIES THAN YOU DID ONE YEAR AGO.
NOW – FOR AS NASTY, OR UGLY, AS THIS REPORT IS, HERE’S THE GOOD NEWS.
ECONOMISTS OVER AT UBS – THINK THIS IS THE WORST OF IT! AND THAT INFLATION WILL STEADILY DECLINE OVER THE REST OF THE YEAR.
IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.

Consumer prices in March climbed to a new 4-decade high of 8.5%, according to a Labor Department report economists described as “nasty” and “ugly.” U.S. inflation was last this high in December 1981.

Just between February and March 2022, prices went up 1.2% across the board, a dramatic spike considering February’s inflation rate of 7.9% was also a 4-decade high.

The month’s massive surge is almost entirely driven by food and energy. Removing those two categories, consumer prices only rose 0.3% the month of March.

The gas index alone shot up 18.3% in one month, a staggering level mainly attributed to Russia’s war on Ukraine. The spike in gas accounted for more than half of the total monthly increase. Over the course of the year, gas is up 48%, according to data by the Bureau of Labor Statistics. Meanwhile, electricity is up 11.1% year over year and grocery prices rose 10% over the past year.

As nasty or ugly as this report is, economists see a silver lining. Many, including those at investment bank UBS, predict this is the inflation peak and forecast a steady decline in the inflation rate over the rest of the year.

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