The U.S. Labor Department’s Consumer Price Index (CPI), a widely used metric to gauge rising costs of living, rose faster than expected in March to a four-decade high of 8.5% as supply-chain woes and the war in Ukraine pushed energy and food prices higher.
The headline CPI, which includes prices for all items basic for living such as food, housing, car, energy, consumer products, is now at its highest point since December 1981, the Labor Department said Tuesday. Analysts and economists had estimated an 8.4% inflation rate in March, according to the FactSet database.
Core inflation, which excludes seasonally volatile food and energy prices, rose 0.3% compared with the prior month, which was slower than the 0.5% expected by analysts.
Investors had sold off risk assets such as stocks and cryptocurrencies amid fear that a spike in inflation would prompt the Federal Reserve to accelerate monetary tightening and rate hikes.
Bitcoin (BTC) was changing hands around $40,509 as of press time.
Inflation in the U.S. was already at levels not seen in four decades, only to be exacerbated by supply chain disruptions and high energy prices last month because of Russia’s devastation in Ukraine.
Western countries led by the U.S. imposed wide-scale sanctions on Russian trade and banks after Russia, one of the globe’s largest exporters of commodities and natural resources, invaded Ukraine on Feb. 24.
White House Press Secretary Jen Psaki warned Monday the Biden administration expected the March CPI headline inflation data to be “extraordinarily elevated” and blamed the war in Ukraine and Russian President Vladimir Putin, saying the spike was “due to Putin’s price hike.”