Prices rise 8.5% – Forbes Advisor
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Inflation continues to tear the US economy apart. The March CPI inflation report shows inflation at its highest level in 41 years, and no one knows how far it will go, or when consumers might feel relief.
Prices in March rose 1.2% from the previous month according to the Bureau of Labor Statistics, higher than the 0.8% increase in February. The price of goods and services increased by 8.5% from March 2021 to March 2022, which represents the highest rate of inflation since December 1981.
Everyday household purchases – from food to clothing to gasoline – continue to be significantly more expensive than a year ago.
What was once considered by the Federal Reserve to be “transitional” inflation is now persisting much longer than expected – and it’s still unclear when Americans will feel relief.
Items that are more expensive due to inflation
These items have seen some of the biggest increases over the past 12 months:
- Meat, poultry, fish and eggs: 13.7% increase
- Fruits and vegetables: 7% increase
- Electricity: 11.1% increase
- Furniture and bedding: 15.8% increase
- Women’s dresses: 10.1% increase
- Jewelery and watches: increase of 2.7%
- Rent for main residences: increase of 4.4%
Things like gasoline and airline tickets have seen giant price increases over the past year, in part due to falling prices due to lack of demand at the start of the pandemic (cars and trucks second-hand vehicles, for example, saw their prices increase by 35.3% from March 2021 to March 2022).
Read more: Gas prices were already rising before Russia invaded Ukraine. And after?
The price increase is national, with little difference between regions. The CPI report reveals that the South recorded a price increase of 9.1% over the year, with the West coming close behind with an increase of 8.7%.
When will inflation go down?
Reports from January suggested that inflation would start to decline by the end of the year, but the current rise in energy prices due to sanctions against Russia for the war in Ukraine is pushing prices even higher.
Inflation first became an issue in the spring of 2021, when the country was emerging from strict Covid-19 protocols. A mix of rebounding demand, supply chain issues and labor shortages have started to push prices up, but they haven’t stopped rising yet.
Nearly two-thirds of adults (65%) believe the rate of inflation will continue to rise in the future, according to a recent Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker report.
Inflation is putting increased pressure on President Joe Biden, whose polls are currently low among the public. Biden has implemented plans to try to rein in skyrocketing gas prices by announcing a historic release of oil from strategic reserves, but it’s unclear how much relief that will bring to consumers.
The Federal Reserve is already working to reduce inflation through monetary policy. The central bank raised the federal funds rate target range from 0.25% to 0.5% in March, the Fed’s first rate hike since late 2018. It now faces the challenge of raising rates interest rate high enough to fight inflation, but not trigger a recession. No less than seven to eight rate hikes are expected this year.
Read more: March 2022 FOMC meeting: Fed raises interest rates to fight record inflation