Inflation jumped in March, as prices for consumer goods, from gasoline to food, posted their biggest increase in almost nine years, the Bureau of Labor Statistics said Tuesday.
The Consumer Price Index, a key measure of inflation, increased a sharp 0.6% and jumped 2.6% over the past year, led by rising energy prices.
The seasonally adjusted 0.6% increase in March was the biggest jump since August 2012 and was driven largely by a 9.1% jump in gasoline.
The monthly and yearly figures came in slightly above economists' expectations and are the first markers in what is likely to be a steady but expected climb in inflation, analysts said.
"The surge in inflation in March is the first meaningful wave of several that will cumulatively lift inflation in the coming months to a level not seen in many years," said Jim Baird, chief investment officer for Plante Moran Financial Advisors. "Even so, the coming surge shouldn't be a cause for alarm."
Last month, the Federal Reserve projected inflation will hit 2.4% this year, up from an earlier estimate of 1.8%, though the Federal Reserve is expected to keep its benchmark interest rate at or near zero through 2023.
Federal Chairman Jerome H. Powell said officials at the central bank want to see inflation track above 2% for a sustained period of time.
"Inflation has been below 2%. We want it to be just moderately above 2%. So that's what we're looking for," Mr. Powell said in an interview that aired Sunday on CBS's "60 Minutes." "That's the situation we're looking for. And when we get that, that's when we'll raise interest rates."
Republicans — and notably, Clinton administration Treasury Secretary Larry Summers — have warned that President Biden's push to plow trillions of additional taxpayer dollars into the economy, on top of the roughly $6 trillion in coronavirus-related spending Congress has authorized since March 2020, is inevitably going to push prices up.
Sen. Rick Scott, Florida Republican, said the Federal Reserve and the Biden administration need to start thinking about how they're going to hold inflation in check.
"What we're starting to see is a significant risk of inflation in this country," Mr. Scott said. "When you see food prices up 3.6% in one year, when you see gas prices up 23% in one year, the poorest families get hurt the most with that."
The White House has downplayed the prospects of runaway inflation in the short term, saying that a rebound in prices is to be expected — particularly in comparison to a year ago, when the coronavirus was starting to wreak havoc on the economy.
Jared Bernstein, a top economic adviser to Mr. Biden, said inflation risks require "close monitoring" but that the Tuesday figures are consistent with "transitory" factors he outlined this week.
Those factors include the abnormal drops in consumer prices at this time last year as the pandemic was taking hold, recent supply chain disruptions, and growing demand as Americans venture out more.
"We expect that moving from a shutdown economy to a post-pandemic economy — with demand fueled by pent-up savings, relief funds and low interest rates — will generate not just somewhat faster actual inflation but higher inflationary expectations, too," Mr. Bernstein and White House economic adviser Ernie Tedeschi said in a blog post.
• This article is based in part on wire service reports.