U.S. inflation spiked in March
Consumer prices jumped 0.9% in March, driven largely by a sharp rise in gasoline after the American‑Israeli strike on Iran — the biggest monthly increase since the pandemic‑era inflation surge. That petrol shock is already spilling beyond the U.S.: the Asian Development Bank warned developing Asia will face weaker growth and higher inflation as the Middle East crisis disrupts energy and trade, underlining a global stagflation risk. ((cnn.com)) ((bloomberg.com)) ((reuters.com))
A gallon of gas moved so fast in March that it dragged the whole U.S. inflation report with it. The Consumer Price Index rose 0.9% from February and 3.3% from a year earlier, the biggest monthly jump since June 2022. (bls.gov) The part that did the damage was energy. The energy index jumped 10.9% in one month, and gasoline prices alone surged 21.2% after oil markets reacted to the U.S.-Israeli strike on Iran. (bls.gov, cnbc.com) That kind of move matters because gasoline shows up everywhere at once: at the pump, in trucking bills, in airline fuel, and in delivery costs for groceries and packages. Reuters reported that the March inflation spike reflected both the Iran war’s oil shock and the pass-through from tariffs already working through prices. (reuters.com) Underneath the headline, the report was calmer. Core inflation, which strips out food and energy, rose 0.2% in March and 2.6% over 12 months, which is why economists described this as an energy shock more than a broad price spiral. (bls.gov, bloomberg.com) Housing also stopped making things worse as quickly as it used to. Shelter costs rose 0.2% in March, and the Bureau of Labor Statistics said that was among the indexes pushing prices up, but far less dramatically than gasoline. (bls.gov) The Federal Reserve now has a harder problem than it did a month ago. A central bank can cool demand with interest rates, but it cannot pump more oil through the Strait of Hormuz or reopen disrupted shipping lanes in the Middle East. (cnbc.com, bloomberg.com) The shock is already spreading beyond the United States because Asia imports a huge share of its energy. The Asian Development Bank said developing Asia and the Pacific now faces slower growth and higher inflation as the Middle East crisis disrupts trade and energy markets. (adb.org, reuters.com) In the bank’s baseline forecast, growth in developing Asia slows to 5.1% in 2026 from 5.4% in 2025, while inflation rises to 3.6% from 3.0%. In its harsher scenario, if energy disruptions last beyond a year, growth could be cut by as much as 1.3 percentage points over 2026 and 2027 and inflation could rise by as much as 3.2 points. (adb.org, reuters.com) That is the old stagflation pattern in plain form: pricier fuel pushes inflation up while the same fuel shock slows factories, shipping, and consumer spending down. March’s U.S. report showed the inflation half of that equation, and the Asian Development Bank’s warning showed the growth half. (bls.gov, adb.org)
