WASHINGTON DC — A recent report from the Department of Labor has spurred inflation fears in the wake of vastly increased federal spending. The report stated that the Consumer Price Index (CPI) increased in March by 0.6% on a seasonally adjusted basis. The CPI is a measure of the price of a basket of common consumer goods, such as food, energy, and housing, which means that a 0.6% increase indicates the average American household would see a 0.6% higher price on these goods at the end of March than at its beginning. This is the largest increase in the CPI since 2012. Much of this increase was driven by a 9% jump in gas prices, which come as the federal government announced a policy of phasing out fossil fuels by 2050.
The CPI has risen 2.6% over the past year, well over the Federal Reserve’s target, which means that a product in the index that cost $100 in March 2020 would be expected to cost $102.60 in March 2021. The CPI has seen wide fluctuations within the past year, as it briefly went negative during the beginning of the pandemic, before returning to positive territory in June.
