Consumer Prices Jumped 8.5% In March, Easily Erasing Most Wage Increases
MIAMI (CBSMiami) – Costs for food, housing, and gasoline helped drive inflation to its highest level in 40 years, according to the U.S. Bureau of Labor Statistics.
The government report released Tuesday and showed consumer prices jumped 8.5% in March, the fastest inflation rate since 1981, easily erasing most wage increases.
"When you put together food, energy and shelter, you can imagine that Americans who are, say, in the lower third of earnings spectrum are really being pressured right now," said CBS News Business Analyst Jill Schlesinger.
March inflation numbers were the first to show the full surge in gasoline prices following Russia's invasion of Ukraine. But fuel costs had been rising steadily amid supply chain snags as the U.S. emerges from the pandemic.
"I do expect that improvement will happen in the months ahead as oil companies continue to increase output," said Patrick De Haan from GasBuddy, an app that helps people find the best gas prices.
President Biden has another plan to try and help drive down fuel costs, allowing the sale of a gas that uses a 15% ethanol blend through the summer. The sale of the E15 gasoline is usually prohibited in the warmer months due to emissions concerns. The White House said the EPA will work with states to monitor for air quality impacts. The administration also said the EPA is considering additional action to facilitate the use of E15 year round.
E15 fuel is available in 30 states at around 2,300 stations and approved for use in vehicles of model year 2001 and newer, according to the U.S. Department of Energy. "E15 is about 10 cents a gallon cheaper than E10 and some gas stations offer an even bigger discount than that," President Joe Biden said.
Trump administration had authorized year-round sales of E15 in 2019, but a federal court later overturned the change.
Pressure is also on the Federal Reserve to tame inflation without stifling growth. "We're looking at the Fed raising rates at least a full percentage point over the next three months, maybe more towards the end of the year," Schlesinger said.
Economists say the March report could be the peak for inflation but caution the ride back down will be a slow one.