Consumer prices rose in March at the fastest monthly pace in 8.5 years as the reopening of the economy picked up steam.
The Labor Department said Tuesday that the consumer price index rose 0.6% month over month, quickening from last month’s 0.4% increase. The reading made for the highest monthly increase since August 2012.
Prices jumped 2.6% year over year, up from a 1.7% annual increase in February.
Economists surveyed by Refinitiv had expected consumer prices to rise 0.5% from the prior month and 2.5% versus the last year.
Gasoline prices rose 9.1% in March, making up nearly half of the index's gains. Elsewhere, natural gas prices rose 5% and food both at home and away from home saw a 0.1% increase.
Core prices, which exclude food and energy, increased 0.3% month over month and 1.5% from a year ago. Economists surveyed by Refinitiv were anticipating core prices to rise 0.2% on a monthly basis and 1.5% annually.
The annual data has a "base effects" skew due to the decline in prices that occurred at the start of the pandemic.
The jump in consumer prices comes amid concerns on Wall Street that the unprecedented amount of fiscal and monetary stimulus that has been used to combat the economic slowdown caused by the COVID-19 pandemic will bring back inflation that has been missing since the 2008 global financial crisis.
Investors worry the Federal Reserve may have to begin tapering its asset purchase program sooner than expected in order to prevent inflation from overshooting the central bank's 2% target. The Fed said last year that it would hold its benchmark interest rate near zero, for some time, even if inflation were to rise above its preferred rate.