Auto Express

Gasoline fuels inflation, with consumer prices up 8.5%



WASHINGTON – U.S. monthly consumer prices rose by the most in 16-and-a-half years in March as Russia’s war against Ukraine pushed gasoline prices to record highs, bolstering the U.S. Federal Reserve case. interest rate 50 basis points next month.

The price hikes reported by the Labor Department on Tuesday have led to annual inflation rising at its fastest pace since late 1981. But there is still some glimmer of hope, with daily underlying price pressures month increased moderately when the price of motor vehicles cooled down. Economists also believe that overall inflation has peaked.

“The Fed will take some comfort from today’s report, but it still has a lot of work to do to restore price stability,” said Sal Guatieri, senior economist at BMO Capital Markets in Toronto. .

The consumer price index rose 1.2% last month, the biggest monthly increase since September 2005. The consumer price index increased 0.8% in February. The 18.3% increase in gasoline prices accounted for more than half of the CPI increase.

According to AAA. As of Tuesday, the average price has dropped to $4.09.

Russia is the second largest crude oil exporter in the world. The United States has banned the import of liquefied petroleum products from Russia nature Air and coal as part of a series of sanctions against Moscow for its invasion of Ukraine.

In addition to pushing up gas prices, the Russia-Ukraine war, now in its second month, has sent food prices soaring globally as Russia and Ukraine are also major exporters of commodities such as wheat. and sunflower oil.

In addition to gasoline, the increase in inflation was widespread. Food prices increased by 1.0%, of which the cost of food consumed at home increased by 1.5% in the context of strong increases in all categories. But the cost of food consumed away from home was adjusted as a 0.7% increase in full-service meals was partially offset by a 0.2% decrease in limited-service meals, the first decline since October 2018.

In the 12 months to the end of March, the CPI increased by 8.5%. That was the biggest annual increase since December 1981 and was followed by a 7.9% increase in February. This is the sixth consecutive month the annual CPI is at 6%.

Last month’s increase in inflation was in line with economists’ expectations.

The strong CPIs followed news last month that the unemployment rate fell to a new two-year low of 3.6% in March. The tightening labor market is fueling wage inflation.

The US central bank in March raised its policy rate by 25 basis points, the first increase in more than three years. Minutes of the policy meeting released last Wednesday seem to set the stage for major rate hikes to come.

High inflation and the Fed’s hawkish stance have spooked bond markets about a US recession, although most economists expect the expansion to continue.

US stocks opened higher. The dollar was stable against a basket of currencies. US Treasury yields fell.

Monthly core CPI slows down

Economists believe March could mark the peak of the annual CPI rate, but caution that inflation will remain above Fed levels 2% target at least until 2023.

Gasoline prices have retreated from record highs, but remained above $4 a gallon. Last year’s high inflation will also start to fall due to the CPI calculation.

“March is likely to be the peak for full-year inflation measures for this cycle,” said Ben Ayers, senior economist at Nationwide in Columbus, Ohio. “However, given the high starting point and the possibility of further delays in supply chain healing, inflation will remain high through 2022 and into 2023.”

Second consecutive monthly discount of old car and truck leads to tame monthly readings for core inflation. The price of new motorbikes is also reasonable. Excluding the volatile food and energy components, the CPI rose 0.3% after rising 0.5% in February.

The 0.5% increase in temporary accommodation costs accounts for nearly two-thirds of the increase in the so-called core CPI. A key measure of rents, the equivalent of an owner’s primary rent, rose 0.4%. The cost of hotel accommodation also increased sharply.

Airfares skyrocketed 10.7%. Household furniture is also more expensive and vehicles Insurance money, clothing, entertainment and personal care. Healthcare costs increased 0.5%, with both doctor visits and hospital services increasing consistently. But the price of prescription drugs fell 0.2%.

The core CPI rose 6.5% in the 12 months to March, its biggest gain since August 1982, after rising 6.4% in February.

Internal lock China to prevent a resurgence of the COVID-19 infection is expected to put more strain on the global supply chain, which could lead to higher commodity prices. In addition, rising housing prices are also expected to keep core inflation hot.



Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button