After fuel costs skyrocketed during the first full month of the Ukraine war, the US inflation rate set a new 40-year high in the year to March.
Following a double-digit jump in energy costs, consumer prices increased by 8.5 percent, the highest yearly increase since December 1981.
Following Russia’s invasion of Ukraine, President Joe Biden imposed a restriction on all oil and gas imports from Russia last month.
At the same time, US gasoline prices hit fresh highs.
The invasion on Ukraine began on February 24th, prompting a flurry of international sanctions against Russia, the world’s second-largest oil supplier.
According to the US Labor Department, energy costs increased by 32% in the year to March.
Food costs had also risen by 8.8% during the same time period, according to the report. Food price inflation has been worsened by Russia’s invasion of Ukraine, just as it has been for energy prices. Both nations are major exporters of commodities like wheat and sunflower oil.
North Carolina resident Kristen Havlik described price rises in her region as “crazy.”
“My rent went up by $400 a month during the first year of the epidemic, which was really difficult to finance because I had lost the majority of my income from one of my jobs,” she told reporters.
“My husband and I were fortunate to both acquire well-paying jobs last year, but we would have had to relocate outside of our region to afford to stay in NC if we hadn’t.”
“We’re both still working class,” she said, “and we can’t save money fast enough to keep up with the ridiculous home-buying market, where sellers are making record profits.”
“Higher energy, food, and commodity costs, which are turbo powered by a deterioration in supply chain difficulties, have added extra fire to the scorching rate of inflation,” said Kathy Bostjancic, chief US economist at Oxford Economics.
The Federal Reserve raised its benchmark interest rate for the first time in three years last month, owing to rising US inflation. The Federal Reserve of the United States has also indicated that interest rates would be raised many times this year.
Inflation and rising food and gasoline costs in Western nations, according to Russian President Vladimir Putin, will begin to exert pressure on governments there.
Prior to Russia’s invasion of Ukraine, inflation rates were already growing as many global markets reopened following the relaxation of Covid restrictions. Prices, on the other hand, appear to be rising at a faster rate than wage increases.
According to recent data, average hourly wages in the United States increased by 5.6 percent in the year to March, far less than the most recent rise in the cost of living.
However, other experts predict that inflation is nearing or has already reached its high in March.
Inflation increased by 1.2 percent month over month in March, compared to 0.8 percent in February. When volatile fuel and food costs are removed, core inflation rises by 0.3 percent, which is less than projected.
“The main line is inflation is likely to be around for a while,” said Peter Cardillo, chief market economist at Spartan Capital Securities, “but we might see it starting to reverse in the summer months, providing we see some cooling off in agricultural and energy costs.”