Inflation is soaring higher than economists expected.
The numbers out this morning show the consumer price index jumped to 8.5% last month, while analysts had forecast an 8.3% rise over the past 12 months. March's sky-high rate is the highest in 40 years, following a 7.9% bump in February, which is reported higher than the inflation rate from 1981. “It’s a red hot number but the market’s reaction for now suggests its priced in, especially with the month over month core read coming in below expectations,” wrote Mike Loewengart, managing director of investment strategy at E-Trade from Morgan Stanley. “The big debate is whether elevated reads like these are the new normal, or if we’re beginning to see a light at the end of the inflationary tunnel.”
Some of the biggest indicators for contributing to inflation increasing so rapidly is due to food, shelter and gasoline, according to the BLS. The index tracking gas prices surged to rise 18.3% month on month in March, comprising more than half of the total monthly increase in CPI. In February, gasoline had posted a 6.6% monthly increase.