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

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.

Nasty. Ugly. These are the words economists used to describe the latest inflation report.

Here it is, for March 2022:

8.5% inflation y/y
1.2% monthly increase

Highest inflation in more than 40 years.

— Simone Del Rosario (@SimoneReports) April 12, 2022

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.