US consumer prices jump 2.6pc compared to March 2020: govt

WASHINGTON: Surging energy prices led the charge as US consumer prices jumped 2.6 percent in the 12 months through March, the Labor Department said Tuesday, in a report capturing a full year of the pandemic.

Compared to February, the consumer price index (CPI) rose 0.6 percent last month, seasonally adjusted, pushed by a 9.1 percent rise in gasoline prices, the report said.

But when compared to the early weeks of the Covid-19 outbreak, when the economy shut down and workers were told to stay home, the data showed gasoline prices posted a massive 22.5 percent increase, without seasonal adjustment.

Food prices also are on the rise, with food away from home gaining 3.3 percent in the latest 12 months, according to the report.

As vaccinations become more widespread, allowing shops and restaurants to reopen and Americans to travel more frequently, economists have warned that inflation will pick up, at least temporarily.

Pent-up demand as well as rising prices for materials and transportation are expected to fuel inflation, particularly when compared to the low prices seen in the early part of the pandemic.

Investors worry the Federal Reserve will be obliged to raise lending rates sooner than expected if inflation gains traction, but Fed Chair Jerome Powell has repeatedly stressed that the factors pushing prices will be temporary.

And he said the central bank will be comfortable seeing inflation above the Fed's 2.0 percent target for a time.

Excluding volatile food and energy components, CPI in March rose 1.6 percent, year-over-year, with a 0.3 percent gain in the month.