U.S. gasoline prices increased 18.3 percent and energy prices increased 11 percent in March compared with February, reported the Labor Department in today's consumer-price index, with the overall annual inflation rising at its fastest pace since the end of 1981.
According to the index – which measures what consumers pay for goods and services – U.S. consumer prices increased 8 percent in the year through March.
“While today’s overall inflation numbers are concerning, the energy numbers (32% overall, 48% for gasoline) are particularly alarming," tweeted American Exploration and Production Council CEO Anne Bradbury. "These energy price spikes are felt by every American family, as energy is foundational for our economy and quality of life. The Biden Administration should pursue policies to alleviate high energy prices: restarting federal leases, unlocking permits, supporting needed pipelines/infrastructure, and collaborating with the oil and natural gas industry. Inflation writ large can’t be fixed without addressing energy inflation first," said Bradbury.
According to Reuters there were some glimmers of hope, with monthly underlying price pressures rising moderately as motor vehicle prices cooled, and economists believe overall inflation has peaked. "The Fed will take a tiny bit of comfort from today's report, but it still has much work to do to restore price stability," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.
Gasoline prices at the pump on average soared to an all-time high of $4.33 per gallon in March, according to AAA. Stubbornly rapid price increases have been exacerbated by a recent surge in gas costs tied to Russia’s invasion of Ukraine.
Russia is the world's second-largest crude oil exporter. The United States has banned imports of Russian oil, liquefied natural gas and coal as part of a range of sanctions against Moscow for its invasion of Ukraine.
"March may prove to be the peak for year-over-year inflation measures for this cycle," said Ben Ayers, senior economist at Nationwide in Columbus, Ohio. "Still, given the high starting point and the likelihood of further delays to the healing of supply chains, inflation readings should remain highly elevated through 2022 and into 2023."
