Surging food, energy, and housing costs sent consumer prices soaring by 8.5 percent in March 2022, a tenth of a percent more than predicted and the highest rate since 1981, according to the Labor Department’s consumer price index (CPI) report.
The Biden administration preempted the CPI report, released on Tuesday, April 12, with a warning.
White House Press Secretary Jen Psaki said Monday that the Labor Department’s previous report — released in February — did not include most of the increased oil and gas prices caused by Putin’s unprovoked invasion.
“We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike,” Psaki said on April 11.
Rising inflation was a problem before Russian President Vladimir Putin attacked Ukraine on Feb. 24. Many economists say they worry that the Federal Reserve waited too long to begin raising interest rates and and could act so aggressively that it triggers a recession.
Federal Reserve Chairman Jerome Powell, who repeatedly downplayed the risk of inflation earlier in 2021, finally said in November 2021 that he was retiring the word “transitory” to describe the inflationary outlook and that he believed that the omicron variant could threaten the U.S. economy.
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Speaking to Congress on Tuesday, Nov. 30, Powell acknowledged the growing risk of more persistent inflation and said Fed policymakers would stop describing the rapid pace of price increases as transitory.
While the March 2022 CPI report is up 8.5 percent from a year ago, real worker earnings fell by another 0.8 percent in March as the cost of living rose faster than otherwise strong pay gains.
“As bad as 8.5% year-to-year inflation sounds — and it is bad, likely leaving hundreds of millions of Americans poorer in real terms — March alone saw a 1.2% spike, which at an annualized rate is +14%. No way your wages keep up w/ that” tweeted Jeff Stein, the White House reported for the Washington Post.
Photo: The gasoline price board is shown at a gas station in Menlo Park, Calif., March 21, 2022. A majority of Americans say they don’t blame President Joe Biden for high gasoline prices, but they’re giving his economic leadership low marks amid fears of inflation and deepening pessimism about economic conditions. (AP Photo/Jeff Chiu)