Although consumer prices continue rise, economic signals suggest inflation may have peaked.
An inflation gauge closely tracked by the Federal Reserve surged 6.6% in March compared with a year ago, the highest 12-month jump in four decades and further evidence that spiking prices are pressuring household budgets and the health of the economy.
Excluding the especially volatile food and energy categories, so-called core prices rose 5.2% in March from a year earlier. That was slightly below the 5.3% year-over-year increase in February, and it was the first time that 12-month figure has declined since February 2021, before the inflation spike began. And on a month-to-month basis, core prices rose 0.3% from February to March, the same as from January to February.Ian Shepherdson, chief economist with Pantheon Macroeconomics, thinks U.S.
High inflation and strong wage increases are leading the Federal Reserve to plan a series of sharp interest rates hikes in the coming months. The Fed is set to raise its benchmark short-term rate by a half-point next week, a faster move than its typical quarter-point hike and the first increase that large since 2000.Outside the United States, too, inflation is surging, forcing other central banks to either raise interest rates or move closer to doing so.
At the same time, paychecks are expanding at a healthy pace, helping consumers keep up with some of the inflation spike. Employers are raising wages because many of them are desperate to find and keep workers. Job openings are near a record high, and the unemployment rate, at 3.6%, is just above the half-century low it reached just before the pandemic.
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A key inflation gauge jumped 6.6% in March, most since 1982WASHINGTON (AP) — An inflation gauge closely tracked by the Federal Reserve jumped 6.6% in March compared with a year ago, the highest 12-month reading in four decades, further evidence that surging prices are pressuring household budgets and the health of the economy.
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