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The Impact of War on Humanity

Summary

Consumer prices increased by the highest since late 1981 in March, indicating a painfully high cost of living and growing pressure on the Federal Reserve to hike interest rates even faster.

Gasoline prices accounted for half of the monthly increase, boosted by the Russia-Ukraine conflict, while food prices also accounted for a significant rise.

According to Labor Department data released on Tuesday, the consumer price index jumped 8.5 percent from a year ago, following a 7.9 percent annual growth in February. The closely watched inflation indicator increased by 1.2 percent from a month before, the most significant increase since 2005.

Excluding volatile food and energy components, core prices rose 0.3 percent month over month and 6.5 percent year over year, owing partly to the most significant reduction in used car prices since 1969 and a slowing of price increases in other product categories.

After statistics showed core inflation grew less than expected, Treasuries jumped, and the currency weakened, erasing an earlier rally. 

High automobile prices, a significant source of increased inflation for months, fell by 3.8 percent in March, marking the second consecutive monthly drop. In the meanwhile, new automobile costs have risen marginally.

In a report, Sal Guatieri, senior economist at BMO Capital Markets, said the statistics are “a nice break from the continuous hot core hikes of late, as fuel costs seem to lessen in reaction to the recent decline in oil prices.”

There are a few items that appear to be delaying the expected reduction in inflation in the coming year: food, housing, and just a few other necessities.

Many analysts believe that the March CPI data reflects the apex of the current inflationary phase, capturing the impact of skyrocketing food and energy costs following Russia’s invasion of Ukraine.

Author’s Bio:

The author is a professional journalist and an award-winning writer; he is a regular contributor to LiveWebTutors. He has a team of professional writers with him offering Online Assignment Help in Canada.

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