Sunday, June 26, 2022

White House warns of ‘extraordinarily elevated’ March inflation

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WASHINGTON: The already-high US inflation rate likely climbed even further last month, the White House warned Monday, amid a spike in energy prices caused by Russia’s invasion of Ukraine.

“We expect March headline inflation to be extraordinarily elevated,” White House Press Secretary Jen Psaki told reporters ahead of the Tuesday release of the closely watched consumer price index (CPI) data.

The world’s largest economy has seen prices rise at record rates as it recovers from the Covid-19 pandemic, with CPI increasing 7.9 percent over the 12 months to February, its fastest rate in four decades.

A range of factors have propelled the price hikes, including component and labor shortages, shipping delays and strong consumer demand spurred by government stimulus policies.

The March report will be the first to fully encompass the fallout from Russia’s invasion of its neighbor and the sanctions imposed by the West in retaliation, which have combined to cause a spike in prices for energy, including gasoline.

Calling it the “Putin price hike,” Psaki said she expected to see “a large difference” between headline inflation and “core” CPI, which excludes volatile food and energy prices.

Economists say the annual inflation rate could be close to 8.5 percent, the highest seen since late 1981.

According to the median forecast of analysts, monthly CPI growth will accelerate to 1.2 percent compared to February when the gain was 0.8 percent rate, while core CPI will remain unchanged at 0.5 percent.

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