Inflation picked up sharply as the economic recovery gained steam, with notable gains in prices for fuel and food.
WASHINGTON — Consumer prices shot higher in March, driven by a strong economic recovery from pandemic-related restrictions, the Labor Department reported today.
The consumer price index – which includes the often volatile categories of energy and food — rose 0.6% from the previous month but 2.6% from the comparable period a year ago.
It was the biggest year-over-year gain since August 2017.
Gasoline prices were the biggest contributor to the rise in consumer prices, increasing by 9.1% in March. Higher fuel prices accounted for about half the CPI’s increase.
Limited service meals – a category that includes grocery pickup, restaurant takeout and food delivery – increased 6.5% year to date, the government reported. The food-at-home category increased 3.3%, while the food-away-from-home category was up 3.7% from a year earlier.
Core CPI, which excludes food and energy costs, increased 0.3% monthly and 1.6% year over year.
The Federal Reserve expects the rise in consumer prices this year to be temporary, driven by such factors as increased vaccination rates and government stimulus to businesses and individuals coping with COVID disruptions.
Economists note that this year’s inflation measurements will be boosted by comparisons with figures from last year, when prices dropped steeply due to collapsing demand for many goods and services, many businesses closed temporarily and millions of consumers sheltered in place at home.
Fed officials see the economy – as measured by gross domestic product – growing by around 6.5% this year, which would be the fastest increase since 1984.