New economic data released Thursday shows inflation is heating back up, driven in part by rising gas prices and growing global tensions — raising concerns about what consumers will pay next.
Reports from the Commerce Department underscore what many Americans are already feeling, especially at the gas pump. The Federal Reserve's preferred inflation gauge jumped 0.7% in March — a sharp increase from the month before — bringing the annual rate to 3.5% compared to this time last year, marking the highest rate of inflation in nearly three years.
Energy prices are a major driver of the increase. Gas prices alone spiked nearly 21% in just one month as global supply concerns grow amid the ongoing war in Iran.
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There was some relief at the grocery store, as prices dipped slightly in March. However, economists warn that may not last, because higher fuel costs often make it more expensive to transport food, meaning higher grocery prices could follow in the coming months.
At the same time, consumer spending jumped 0.9%, though much of that increase reflects the higher prices consumers are already paying rather than increased demand.
