Gas Prices Drive a Big Spike in Inflation
AP Photo/Nam Y. Huh
A new inflation report released Friday shows a sharp rise in consumer prices, largely fueled by a surge in gasoline and other energy costs tied to the ongoing conflict with Iran.
According to the Labor Department, consumer prices in March were 3.3% higher than they were a year earlier. That marks a significant increase from February, when the annual rate stood at 2.4%.
On a month-to-month basis, prices climbed 0.9% from February to March, representing the biggest monthly increase in nearly four years. Energy costs were a major factor in the jump, rising 10.9% during the month.
When food and energy—two categories known for large price swings—are removed, the underlying inflation rate looked more stable. Core prices were 2.6% higher in March than a year earlier, slightly above the 2.5% annual increase recorded in February. However, the monthly change in core prices was relatively mild, increasing just 0.2% in March, indicating that the spike in gas prices has not yet broadly pushed up costs across other parts of the economy.
Financial markets appeared to take the report in stride. Investors had largely anticipated the increase, and attention remained focused on upcoming weekend peace talks. Shortly after the inflation data was released, Dow futures were up about 15 points.
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