In March, the United States (US) inflationary spiral accelerated, with prices rising 8.5 percent from a year before. Energy costs soared as a result of Russia’s war in Ukraine, resulting in the highest annual increase since December 1981.

The White House and the Federal Reserve have initiated a number of steps in an attempt to contain growing prices, but greater costs appear to be everywhere, particularly in consumer staples that most families cannot live without. Gasoline, food, and a variety of other items have all increased in price, putting financial burden on people and companies, as well as causing political headaches for the White House and congressional Democrats.

The economy is now forecast to develop at a slower pace later this year, owing to inflation, which causes people and businesses to reconsider particular purchases and potentially reduce spending.

The Bureau of Labor Statistics announced inflation on Tuesday, prices jumped 1.2 percent in March compared to February. The major contributions to inflation were price hikes for petrol, accommodation, and food, highlighting how unavoidable these price rises have become.

For much of the previous decade, inflation was quite stable, even low, but it quickly increased as the world economy recovered from the pandemic. As supply chain difficulties were resolved and government support receded, a lot of economists and policymakers predicted that inflation would fall this year. However, Russia’s invasion of Ukraine in February sparked a fresh round of anxiety, pushing prices further higher.

Despite a relatively healthy labour market, widespread inflation has made President Biden’s and Democrats’ economic performance a big liability. The government has attempted to recast the recent jump in inflation as a “Putin Price Hike,” but the language does not appear to have improved Biden’s economic approval rating ahead of the 2022 midterm elections.

World leaders have attempted to economically isolate Russia in response to its invasion of Ukraine, but this has only increased economic instability.

Russia is one of the world’s top oil producers, and the US government and others have tried to limit Russia’s capacity to sell energy as a result of its invasion of Ukraine. These actions pushed up energy prices; crude oil hit fresh highs last month, and gasoline prices followed suit. Russia and Ukraine are major producers of wheat and other commodities, and their prices have risen as well.

With petrol prices in many parts of the country still above $4 per gallon, the White House has sought to come up with new plans to help, such as releasing oil from the Strategic Petroleum Reserve. The Biden administration also stated on Tuesday that the Environmental Protection Agency will allow a sort of blended gasoline to be sold throughout the summer to increase supplies, though the specific implications remain unknown. Only 2,300 of the 150,000 gas stations in the US sell the E15 gasoline that would be affected.

Biden said the administration has already made headway in cutting gas prices since March, and that the White House would work harder to bring down food and gasoline costs, particularly in light of Russia’s invasion.

“I’m doing everything within my power by executive orders to bring down the price and address the Putin price,” Biden said. “We’ve already made progress since March inflation data was collected. Your family budget, your ability to fill up your tank — none of it should hinge on whether a dictator declares war, or commits genocide and a half a world away.”

Republican senators, who have long attacked the Fed and the White House for being too slow to tackle inflation, were unconvinced by the administration’s pronouncement on Tuesday.

“Inflation just reached 8.5 percent — a new 40-[year] high — for the fifth month in a row,” tweeted Patrick J. Toomey (R-Pa.), the top Republican on the Senate Banking Committee. “Americans’ paychecks are worth less and less each month. Unfortunately, the administration’s new scheme to address soaring gas prices by forcing more ethanol into the system will likely lead to higher corn, i.e. food, prices. This must be a wake-up call for the White House.”

The March inflation data revealed the year-over-year increase in energy prices. In the last 12 months, the energy index has risen 32.0 percent. After rising 6.6 percent in February, the gasoline index rose 18.3 percent in March.

Despite recent drops in crude prices, sticker shock at the pump continues to taint many Americans’ perceptions of the economy.

In March, the food index increased by 1% over February. It has increased by 8.8% during the previous 12 months, the most since May 1981. There aren’t many categories that haven’t been impacted. From February to March, sales of breakfast cereal increased by 2.4 percent. Rice prices increased by 3.2 percent, ground beef prices increased by 2.1 percent, and egg prices increased by 1.9 percent. Milk increased by 1.3 percent, potatoes increased by 3.2 percent, and canned fruits and vegetables increased by 3.8 percent.

Rents increased by 4.4 percent year over year in March, and by 0.4 percent in February alone.

Iris Poole, who lives in Austin, buys milk, eggs, butter, canned foods, and poultry when it’s on sale. She solely buys store-brand generics. Her bill went from around $60 to $85 just two weeks ago. She saves money on petrol by commuting with friends, walking to activities around town, and working from home, according to her.

Poole works as an operations manager for a streetwear business and frequently hears from clients who are unable to find room in their budgets for new gear due to growing living costs. Her own spending habits have to shift as well.

“I have less of a budget now because of what’s been going on in the past two years,” Poole said. “I just want to eat and provide for my needs.”

Food insecurity in eastern Massachusetts is still 30% higher than pre-pandemic levels, according to Catherine D’Amato, president and CEO of the Greater Boston Food Bank. According to D’Amato, one of the pantry’s partners recently went from seeing 400 to 500 households every week.

According to D’Amato, widespread inflation leads families to make difficult trade-offs between increased heating costs, higher gasoline costs, and higher food expenditures.

“Every individual has their own rate of inflation,” D’Amato said. “If you have to put gas in your car, or pay for items for your children, or clothing, or your utility bills, or your rent, then you’re going to take away from food money.”

Only a few months ago, White House and Federal Reserve officials thought that inflation would begin to decline month by month. However, Russia’s invasion, widespread shutdowns at major Chinese manufacturing hubs, and the gloomy reality that inflation continues to creep through every crevice of the economy swiftly shattered those expectations.

“One cannot escape it, even if one wanted to,” said Joe Brusuelas, chief economist at RSM. “This is going to continue for a while.”

Inflation has remained stubbornly high, raising fears of an impending economic recession among economists and experts. Bank of America analysts cut their growth forecast for 2022 from 3.6 percent to 3.3 percent in March. Officials at the Federal Reserve recently reduced their GDP predictions, warning that the war in Ukraine is putting a pall over the world order.

Given low unemployment and the relative robustness of household balance sheets, Fed officials believe the economy is still strong. The Fed, on the other hand, will try to cool the economy without forcing it to contract completely as it attempts to control inflation.

However, it’s unknown how severe a downturn will be, or how much economic growth will be shaved off by months of inflation.

“Every time inflation is a little higher, I expect … real growth to be somewhat lower,” said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget. “We’re getting to the point that inflation is eating output, in some ways.”

Despite this, the March inflation data was upbeat. As a global semiconductor scarcity collides with soaring consumer demand, secondhand vehicle and truck prices have become a big drag on inflation. However, the used car and truck index decreased 3.8 percent in March, marking the second straight monthly decline.

Inflation has been one of the most vexing aspects of the epidemic recovery, weighing heavily on households all around the country. Rents are rising, food are becoming more expensive, and incomes are swiftly eroding for families struggling to make ends meet. Households aren’t anticipating a quick respite. Consumers in the US predicted 6.6 percent inflation over the next 12 months in March 2022, up from 6.0 percent in February, according to statistics from the New York Fed. That was the highest reading since the survey began in 2013, as well as a significant month-over-month increase.

To try to slow inflation, the Fed raised interest rates for the first time since the pandemic began in mid-March, with six more hikes planned for later this year. Officials have hinted in recent weeks that even more substantial raises could be on the way in the coming months.

“The expectation going into this year was that we would basically see inflation peaking in the first quarter, then maybe leveling out,” Fed Chair Jerome H. Powell said in March. “That story has already fallen apart. To the extent that it continues to fall apart, my colleagues and I may well reach the conclusion that we’ll need to move more quickly.”

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