Higher gasoline prices played a significant role in driving inflation up beyond expectations in March.
Data from the Bureau of Labor Statistics released Wednesday revealed that headline inflation surged by 0.4% compared to the previous month and by 3.5% over the past year.
The BLS report highlighted that gasoline and shelter costs combined contributed to over half of the monthly increase in the Consumer Price Index (CPI).
Gasoline prices surged by 1.7% from the previous month, following a 3.8% jump in February. Before seasonal adjustments, gasoline prices soared by 6.4% in March.
As the spring driving season commences, gasoline prices typically rise. Retail pump prices have been on an upward trajectory, aligning with the trend in oil prices. Recent refinery constraints and declining inventories have also impacted fuel costs.
According to AAA data, the national average for gasoline stood at $3.62 per gallon on Wednesday, marking a $0.23 increase from the previous month.
With the exception of fuel oil, all components of the energy index saw increases last month, driving the gauge up by 1.1% in March following a 2.3% rise in February.
On an annualized basis, the energy index rose by 2.1%, with all components experiencing gains except for fuel oil, which saw a decline of 3.7%.
US crude futures surpassed $80 per barrel in mid-March and have maintained levels above that mark since then.
On Wednesday, West Texas Intermediate (CL=F) traded slightly above $85 per barrel while Brent (BZ=F), the international benchmark price, traded below $89 per barrel.
The oil alliance OPEC+ plans to maintain output cuts of 2.2 million barrels per day until June. Geopolitical tensions have also contributed to upward pressure on prices.
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