Ukraine Crisis Pushes US Inflation To New Four-decade High

Umer Jamshaid Published April 12, 2022 | 11:42 PM

Americans paid more for gasoline, food and other essentials last month amid an ongoing wave of record inflation that Russia's invasion of Ukraine made worse, according to government data released Tuesday

Washington, (APP - UrduPoint / Pakistan Point News - 12th Apr, 2022 ) :Americans paid more for gasoline, food and other essentials last month amid an ongoing wave of record inflation that Russia's invasion of Ukraine made worse, according to government data released Tuesday.

The Labor Department's consumer price index (CPI) climbed 8.5 percent over the 12 months to March, a rate -- not seen since December 1981 -- that added pressure to President Joe Biden's administration even as it looks for ways to punish Moscow for the attack on its neighbor.

Prices have surged across the world's largest economy as it tries to recover from the Covid-19 pandemic, dragging Biden's approval ratings lower, though the March data contained signs that the spike was rounding off.

"The Russia-Ukraine war has added further fuel to the blazing rate of inflation via higher energy, food, and commodity prices that are turbo charged by a worsening in supply chain problems," Kathy Bostjancic of Oxford Economics said.

Compared to February, prices rose 1.2 percent, within analysts' forecasts, but if there was good news to be found in the data, it was in "core" prices, which exclude the volatile food and energy sectors. These increased 0.3 percent last month, less than economists anticipated.

The data nonetheless underscored the potency of the price jumps and bolstered the case that the Federal Reserve will take aggressive action at its policy meeting next month, likely raising rates by half a percentage point as opposed to the quarter-point increase agreed to last month.

"With labor shortages pressuring firms to raise wages, we are in the midst of a wage-price inflation cycle that will require extreme action on the part of the Fed to rid the economy of the spreading inflation threat," economist Joel Naroff said.