Consumer prices surge to highest pace in nearly 30 years

Consumer prices at the wholesale level accelerated faster than expected in March to the fastest pace in almost 30 years.

The Federal Reserve Bank of Chicago said its index of consumer prices at the wholesale level rose 6.8 per cent over the past year. That’s the most since the index was created in 1982. Overall prices at the wholesale level rose 5.1 per cent. The increase followed a 4.4 per cent rate of increase in February.

In recent months, inflation has accelerated in response to the economy’s strong growth. Low unemployment has also boosted the costs of hiring and wages, giving manufacturers and wholesalers the option to raise prices.

Prices last reached the Fed’s target for annual inflation when the country was just starting to recover from the Great Recession. Since then, the Fed has raised interest rates six times. It expects to raise rates three more times this year. That would increase the benchmark rate by another quarter-point to a range of 2.75 per cent to 3.25 per cent.

Consumer prices rose 4.1 per cent over the past year. Over the past five years, retail prices, which include such goods as clothes, gasoline and haircuts, have been mostly in a steady uptrend.

Shoppers continue to struggle with the higher costs of commuting, groceries and medicine, as the Labor Department reported last week.

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