Inflation up 8.5%, highest in 41 years

Over the past year, the consumer price index jumped 8.5%, the steepest climb since 1981, according to an Associated Press report. The Labor Department announced the figures this week, stating prices have been driven up by bottlenecked supply chains, consumer demand, and disruptions to global food and energy markets. The biggest month-to-month jump since 2005 was from February to March of this year, with inflation rising 1.2%.

In the past 12 months, gasoline prices rose 48%, used car prices were up 35.3%, bedroom furniture was up 14.7%, and grocery prices were up 10%. Higher energy prices have led to higher transportation costs for shipments of goods. This has also contributed to higher prices for consumers. 

The consumer price index information will solidify expectations that the Federal Reserve will aggressively raise interest rates to slow borrowing, spending, and inflation. 

Economists note that as consumers increase post-pandemic spending, they are broadening their spending beyond goods to include more services. Because of this, travel, health care, and entertainment prices have also risen.