U.S. inflation continues to rise at a record-setting pace and hit a 12-month rate of 8.5% in March, according to a report issued Tuesday by the U.S. Department of Labor.
While the 8.5% inflation rate is the U.S. overall average, Utah and other Mountain West states that include Arizona, Colorado, Idaho, Montana, Nevada, New Mexico and Wyoming saw annual inflation increase at a nation-leading 10.4%.
The 12-month jump is the largest increase since December 1981, according to the report. Prices have been driven up by bottlenecked supply chains, robust consumer demand and disruptions to global food and energy markets worsened by Russia’s war against Ukraine.
Basic necessities continue to be among the main drivers of cost increases for U.S. consumers, and the March report notes indexes for gasoline, shelter and food were the largest contributors to the seasonally adjusted all-items increase. The gasoline price index rose 18.3% in March and accounted for over half of the all-items monthly increase. Gas prices are up 48% over the same time last year.
The March inflation numbers were the first to capture the full surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24. Moscow’s brutal attacks have triggered far-reaching Western sanctions against the Russian economy and have disrupted global food and energy markets.
On Tuesday, the average gas price in Utah stood at $4.499 per gallon, just a tad below the all-time record of $4.508 per gallon set on April 9. The average U.S. gas price was at nearly $4.10 per gallon, down from a national record of $4.331 set on March 11.
Across the country, the cost of groceries is up 10% over last March, electricity costs are now 11% pricier than a year ago, and shelter is up 5% over the last 12 months.
Prices of new and used vehicles also continue to surge, up 12.5% and 35.3%, respectively.
Since last summer, Utahns have registered increasing concerns over the wide-ranging price hikes on goods and services, sentiment traced by monthly polling conducted by the Deseret News in partnership with the Hinckley Institute of Politics.
In a statewide poll conducted by Dan Jones & Associates from March 9-21 of 804 registered Utah voters, an overwhelming majority of respondents, 93%, said they were very or somewhat concerned about inflation, a number that matched what pollsters heard from Utahns in a February survey.
Poll participants also logged their worries about household earnings simply not keeping up with rising costs, and most said they haven’t seen any meaningful increases in their paychecks over the past year.
While 38% of respondents said they’d seen a raise in the past 12 months, 62% said their income has stayed the same, and 75% of those polled said their pay was simply not keeping up with inflation.
Ogden resident Marie Barnard participated in the March poll and said her two-income household, which also includes a toddler, has so far been able to absorb the rising costs of life necessities but noted inflation is bringing a new focus on economizing.
“For us, with a younger family, the higher prices for groceries, diapers, gas to get back and forth to work and from day care, we’re definitely feeling it,” Barnard said. “And we’re being more conscious of things like sales at the grocery store and working to be more aware of cutting down on driving and being efficient when we do.
“As of right now, we are doing OK, but if things keep trending up we may have to reevaluate.”
The same March survey also asked Utahns who they thought bore responsibility for the rise in inflation. While respondents were nearly united in expressing their concerns over wide-ranging price increases, they gave more varied answers to the question about who is to blame.
Not surprisingly, perhaps, partisanship played a role in the survey of 804 registered voters conducted March 9-21. A plurality of respondents, 33%, pointed the finger at the Democratic Party when asked “who or what is to blame for inflation.” Republicans fared much better, earning only 6% in the blame game, while the Federal Reserve was seen as slightly more liable at 8%. The prices and policies of corporate America were the source of inflation for 17% of poll participants, and 23% believed higher costs can be tracked back to the economic fallout from COVID-19.
The poll results have a margin of error of plus or minus 3.45 percentage points.
The latest evidence of accelerating prices will solidify expectations that the Federal Reserve will raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation. The financial markets now foresee much steeper rate hikes this year than Fed officials had signaled as recently as last month.
Even before Russia’s war further spurred price increases, robust consumer spending, steady pay raises and chronic supply shortages had sent U.S. consumer inflation to its highest level in four decades. In addition, housing costs, which make up about a third of the consumer price index, have escalated, a trend that seems unlikely to reverse anytime soon.
Contributing: Associated Press