Inflation Jumps Again in March 2022


In March 2022, the Consumer Price Index for all Urban Consumers (CPI-U) was up by 1.2% on a seasonally adjusted basis, versus an 0.8% rise in February. The 1.2% increase in March is equivalent to a compound annualized rate of 15.4%.

The all items index has risen by 8.5% during the past 12 months, up from the figure of 7.9% recorded in the 12 months through February 2022. This once again represents the biggest 12-month increase in 40 years, this time being the largest year-over-year surge in prices since the period ending in December 1981.

Key Takeaways

  • In March 2022, inflation, as measured by the CPI-U, posted its biggest 12-month increase since December 1981.
  • The 12-month increase was 8.5%, up from 7.9% in the period through February 2022.
  • The one-month rise in March was 1.2%, up from 0.8% in February.
  • Price hikes for gasoline, shelter, and food again were the key drivers of overall inflation.
  • The index for all items less food and energy was up by 0.3% for the month, down from 0.5% in February.
  • All items less food and energy were up by 6.5% over the past 12 months, the largest rise since the period ending August 1982.

Key Drivers: Gasoline, Shelter, and Food

The March 2022 rise in the all items CPI-U was driven mainly by increases in the prices of gasoline (up by 18.3% for the month), shelter (up by 0.5% for the month), and food (up by 1.0% for the month). Rising gasoline prices accounted for more than half of the overall increase in the CPI-U.

Other categories that recorded price increases of more than 1.0% for the month were fuel oil (up 22.3%), energy commodities (up 18.3%), electricity (up 2.2%), and transportation services (up 2.0%). The only declines observed in March were for used cars and trucks (down 3.8%) and for commodities less food and energy commodities (down 0.4%).

Over the past 12 months, the energy index was up by 32.0%, while the food index increased by 8.8%. The index for all items less food and energy rose by 0.3% in March, down from 0.5% in February. Over the past 12 months, the index for all items less food and energy was up by 6.5%, its largest 12-month rise since the period ending August 1982.

Shelter was up by 0.5% in March, the same as in February, after a rise of 0.3% in January. Shelter accounted for almost two-thirds of the March increase in the all items less food and energy index. Its 12-month increase was 5.0%.

Energy

The energy index was up by 11.0% in March, following an increase of 3.5% in February. The gasoline index was up sharply in March, increasing 18.3% on the heels of a 6.6% rise in February. Before seasonal adjustment, gasoline jumped by 19.8% in March.

The index for natural gas rose 0.6% in March, down from 1.5% in February. The electricity index rose sharply in January by 4.2%, declined by 1.1% in February, but was up by 2.2% in March.

Over the past 12 months, while the overall energy index was up by 32.0%, gasoline rose by 48.0%, energy commodities by 48.3%, fuel oil by 70.1%, utility piped gas service by 21.6%, energy services by 13.5%, and electricity by 11.1%.

Food

The food index increased by 1.0% in March, with food at home having risen by 1.5% and food away from home by 0.3%. Over the past 12 months, the overall increase of 8.8% in the price of food includes a 10.0% rise in food at home and a 6.9% hike in the price of food away from home. These 12-month increases were, respectively, the largest since the periods ending in March 1981 and December 1981.

All major grocery store food group indexes have increased in March and over the past 12 months.

For food away from home, the index for full service meals rose by 0.7% in March, while the index for limited service meals was down by 0.2%, its first decline since October 2018. Over the past 12 months, full service meals were up by 8.0%, and limited service meals rose by 7.2%. However, the index for food at employee sites and schools fell by 30.5% over the past 12 months, reflecting widespread free lunch programs.

Vehicles, Transportation, Apparel

The rising prices of vehicles, both new and used, have been major contributors to overall inflation. New vehicle prices rose by 0.2% in March and were up by 12.5% over the past 12 months. Used cars and trucks saw a decrease of 3.8% in March but were up by 35.3% over the past 12 months.

Several other transportation-related indexes recorded large increases over the past year. Airline fares jumped by 10.7% in March, following a 5.2% increase in February. Transportation services in total were up by 7.7% during the past 12 months, after monthly increases of 1.0% in January, 1.4% in February, and 2.0% in March.

Shoppers for clothing also are seeing rising prices. Apparel was up by 0.6% in March and 6.8% higher than a year ago.



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