The consumer price index for March will be released Tuesday, and it’s almost certainly not going to be pretty.
In fact, it could be downright ugly, with the biggest rise in inflation since December 1981.
Economists expect that prices rose by 8.4% from a year before, which is even worse than the 7.9% increase seen in February.
Blame the usual suspects — the coronavirus, the war in Ukraine, soaring energy costs. Stir them together and you get pain at the cash register and pain at the gas pump.
The Dow plunged more than 400 points Monday as investors swallowed hard and readied themselves for the latest inflation data.
Wall Street also was jittery after the Federal Reserve released a survey showing that consumers’ inflation worries are now at a record high.
The survey comes as the Fed embarks on a series of rate hikes aimed at cooling the economy and bringing prices down to more sensible levels.
It shows that consumers are most anxious about rising rents, rising medical costs, rising gas prices and rising grocery bills.
If that anxiety results in people cutting back on spending, well, that’s another thing to worry about. Consumer spending represents about two-thirds of total U.S. economic activity.
Any spending cutback, in other words, could ripple through the economy, and not in a good way.
On the bright side, this too shall pass. Some economists believe we’re through the worst when it comes to sky-high oil prices. Lower fuel costs, in turn, could help reduce the prices of other commodities and goods.
Let’s hope.
