U.S. consumer prices increased a sharp 0.6% in March, the biggest increase since 2012, while inflation over the past year rose a sizable 2.6%. The big gains were expected to be a temporary blip and not a sign that long dormant inflation pressures were emerging.
The increase in its consumer price index followed a 0.4% increase in February and was the biggest one-month gain since a 0.6% rise in August 2012, the Labor Department reported Tuesday.
The 2.6% year-over-year increase was much larger than the 1.7% increase for the 12 months ending in February. While the 2.6% advance was significantly higher than the Federal Reserve’s 2% target for inflation, the jump reflected in large part the fact that a year ago prices were actually falling as the pandemic shut down the country.
Fed Chairman Jerome Powell has repeatedly stressed that the central bank has been expecting a spring spike in inflation measures but views the increases as temporary and not a worrisome development that will prompt the central bank to begin raising interest rates.