The Ministry of Labor announced on Tuesday that the consumer price index jumped 8.5% in March from 12 months earlier – the largest increase from year to year since December 1981. Prices have risen due to tight supply chains, strong consumer demand and disruptions in world food and energy markets exacerbated by Russia’s war against Ukraine. Inflation rose by 1.2 percent in March alone from February. This is the biggest increase in a month since 2005 and an increase of 0.8 percent from January to February. March inflation figures were the first to record a full rise in gasoline prices following Russia’s February 24 invasion of Ukraine. Moscow’s brutal attacks have sparked widespread Western sanctions against the Russian economy and disrupted global food and energy markets. The average price of a gallon of gasoline in the US currently costs US $ 4.10, an increase of 43 percent from a year ago. “The war in Ukraine has complicated the outlook for inflation,” said Luke Tilley, chief economist at the Wilmington Trust. This increase in the price of filling a tank has added to the cost of almost everything that depends on shipping to get to the consumer’s door. The staggering figure raises the possibility that the US Federal Reserve will be even more aggressive in raising interest rates for the rest of the year, in order to try to slow borrowing and spending and tame inflation. Inflation, which has been largely under control for four decades, began to accelerate in the US, Canada and around the world as economies recovered with unexpected speed and strength from the brief but catastrophic recession of the coronavirus that began in the spring. 2020. The recovery, fueled by huge infusions of government spending and extremely low interest rates, has taken businesses by surprise, forcing them to try to meet growing customer demand. Factories, ports and shipyards found it difficult to keep up, leading to chronic delays in shipping and price spikes. Although it is an impressive number from any measurement, some economists are beginning to think that March may prove to be the high benchmark for inflation, as the number will slowly begin to decline from now on. “March is likely to be the peak of inflation, as the indexes will decline from some strong measurements from last year starting in April, while gasoline prices have fallen recently,” said CIBC economist Kathryn Judge.
