March inflation report: Prices rose sharply amid concerns about economic slowdown – The Washington Post

by | Apr 12, 2022 | Financial

Placeholder while article actions loadPrices rose 8.5 percent in March compared with a year ago, the largest annual increase since December 1981, as Russia’s war in Ukraine sent energy prices soaring.The White House and Federal Reserve have launched several initiatives to try and corral inflation, but the spike in prices on gasoline, food, and a range of other products continues to weigh on millions of Americans. The economy is now expected to grow at a slower pace later this year, in part because inflation causes families and businesses to weigh whether to scale back on purchases to protect their budgets.The inflation data, released Tuesday by the Bureau of Labor Statistics, showed prices rose 1.2 percent in March compared with February. Price increases for gas, shelter and food were the largest contributors to inflation, underscoring how inescapable these costs have become. .Five charts explaining why inflation is at a 40-year highInflation was relatively steady, even low, for much of the past decade, but picked up markedly as the global economy emerged from the pandemic. A number of economists and policymakers thought inflation would ease this year as supply chain issues cleared up and government stimulus faded. But Russia’s February invasion of Ukraine created a new burst of uncertainty and pushed prices even higher.AdvertisementDespite a relatively strong labor market, widespread inflation has created major political problems for President Biden and Democrats. The administration has tried to rebrand the recent spike of inflation as a “Putin Price Hike.” But that rhetoric does not seem to have lifted Biden’s approval rating on the economy ahead of the 2022 midterms.Attempts to isolate Russia have also carried consequences for the world economy, putting supplies of oil, wheat and other commodities are under new pressures.Russia is one of the world’s largest producers of oil, and its invasion of Ukraine prompted the U.S. government and others to try and restrict Russia’s ability to sell energy. Those moves drove up energy costs; crude oil soared to new highs last month, and rising gasoline prices quickly followed.The White House has tried to address the situation by releasing oil from the Strategic Petroleum Reserve. The Biden administration on Tuesday announced that the Environmental Protection Agency was going to allow a type of blended gasoline to be sold in the summer in order to create more supply, though the exact ramifications of this are unclear. Only 2,300 of the nation’s 150,000 gas stations offer the E15 gasoline that would be affected.AdvertisementThe March inflation report showed how much of a hit the energy sector has taken. Overall, the energy index rose 32.0 percent over the past year. The gasoline index grew 18.3 percent in March after climbing 6.6 percent in February.Even as crude prices ease up, sticker shock at the pump continues to stretch peoples’ wallets and sour their perceptions of the overall economy.Inflation explained: how prices took offThe food index rose 1 percent in March compared to February. It is up 8.8 percent compared to the prior 12 months, the largest increase since May 1981. Few categories have been left untouched. Breakfast cereal was up 2.4 percent from February to March. Rice prices rose 3.2 percent, ground beef grew 2.1 percent, and eggs were up 1.9 percent. Milk was up 1.3 percent, potatoes 3.2 percent, and canned fruits and vegetables tacked on 3.8 percent.AdvertisementRents were up 4.4 percent compared to the year before, and 0.4 percent in March compared to February alone.Catherine D’Amato, president and chief executive officer of the Greater Boston Food Bank, said that in eastern Massachusetts, food insecurity is still 30 percent above pre-pandemic levels. D’Amato said one of the pantry’s partners recently went from seein …

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