Government data out Friday will show how much consumer prices rose in March — and forecasts point to soaring inflation.
Over the past month, the US-Israel war on Iran has sent gas prices skyrocketing past $4 a gallon and all but ensured that recent reports of cooler price growth will be reversed. Economists surveyed by Bloomberg now see headline inflation in March up 3.4% from a year ago and 0.9% from a month prior — a rapid acceleration from February’s annual increase of 2.4% and monthly bump of 0.3%.
If economists’ projections hold, March would post the largest monthly gain since June 2022.
Read more: What is inflation, and how does it affect you?
It’s not just energy prices that have market-watchers concerned: About a third of globally traded seaborne fertilizer passes through the Strait of Hormuz, which could eventually weigh on the already elevated cost of food.
On a “core” basis, which strips out volatile categories like food and energy, prices are estimated to increase by a more modest 0.3% from February’s levels and 2.7% on an annual basis.
But even though it’s “likely too early to see impacts of the Iran war” in core inflation, as Bank of America economist Stephen Juneau wrote in a note this week, “we will be watching airfares and delivery services to see if there are any early signs of higher oil prices seeping through to the broader basket.”
Then there are tariffs, which continue to weigh on prices. In a note this week, Goldman Sachs economists Jessica Rindels and Ronnie Walker wrote that tariffs are expected “to continue to modestly boost monthly inflation over the next few months,” with impacted categories including recreation, household furnishings, and more.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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