Annual inflation in the US reaches 8.5% and is the highest in 41 years

Inflation in the United States soared last year, with rising costs of food, gasoline and housing, among other items. Prices rose 1.2% in March from February, according to the Labor Department.

Year-over-year, inflation jumped 8.5% in March, the highest since December 1981.

Prices were driven by supply disruptions, robust demand and disruptions to global food and energy markets, exacerbated by the war in Ukraine.

The rise strengthens expectations that the Federal Reserve (Fed, US central bank) will raise interest rates in the coming months.

Even before the war accelerated the increases, higher consumer spending, wage increases and supply shortages drove US inflation to its highest level in 41 years.

Economists point out that as the economy emerged from the pandemic, consumers increased their spending.

The result is that inflation, which at first reflected mainly scarcity of goods (cars, furniture, electronics, etc.), is also emerging in services such as travel, medical care and entertainment.

Rising Fed rates are likely to make borrowing more expensive. Mortgage rates in particular, while not directly influenced by the Fed, have skyrocketed in recent weeks, making home ownership more expensive.

Many economists say the Fed has been slow to start raising rates and may end up acting so aggressively that it triggers a recession. The information is from the newspaper. The State of São Paulo.