Consumer prices jump in March as White House tracks inflation

WASHINGTON — Consumer prices in the United States jumped 2.6 percent in March compared with that month in 2020, fueled by a strengthening economy and comparisons to last spring, when the coronavirus pandemic threw the country into desperate straits.

The federal government's consumer price index, which measures the change in what customers pay for goods and services such as groceries, clothing and gas, increased by 0.6 percent from February to March, notching another rise in prices for the year, the Labor Department said Tuesday. But U.S. officials have stressed that even though inflation is ticking upward, the changes probably will be short-lived as parts of the economy normalize in the wake of the coronavirus pandemic.

The latest figures came in slightly higher than economists had expected, with projections at 2.5 percent for the year and 0.5 percent month-to-month.

The jump in prices highlights the drastic changes to the economy from one year ago, when the pandemic unleashed havoc on consumers, businesses and suppliers, and compelled the White House and Congress to authorize emergency spending to tackle the crisis. This year, health workers have administered millions of vaccine doses, and the Biden administration continues to roll out coronavirus relief packages.

But the federal government's massive spending programs have drawn criticism from some market analysts and Republican lawmakers who have raised concerns about overspending and overstimulating the economy. The hundreds of billions of dollars in relief, they say, could trigger longfeared inflation, an argument that critics probably will amplify after the data is released.

The Federal Reserve and the White House, however, have pushed back against those claims, anticipating the uptick in prices.

In a blog post on Monday, White House officials said they expect inflation to increase somewhat, but that the main factors driving those upticks, including pent-up demand and supply chain disruptions, to subside over time, as businesses regain their footing. After several months of a modest rise, the officials foresee inflation fading “back to a lower pace thereafter as actual inflation begins to run more in line with longer-run expectations.”

In a direct reference to the consumer price index, the officials also noted that the sudden and massive disruptions from last spring will distort annual comparisons, since prices dropped so drastically last year, when the coronavirus first took hold of the economy. They predict that as more time passes from the worst economic period of the pandemic, the spikes in rising price data should flatten.

Despite a surge in hiring and a strengthening economy, Fed officials maintain that the job market is still in rough shape for millions of Americans. The number of people who have been unemployed for more than six months remains above 4.2 million, up from more than 1 million from before the pandemic.

The Fed now expects inflation to hit 2.4 percent this year, up from an earlier estimate of 1.8 percent, but the persistence of unemployment has pressured central bankers to not ease up on emergency measures to repair the economy.

During an interview on CBS News' “60 Minutes” on Sunday, Fed Chair Jerome H. Powell said that the central bank would not raise interest rates, in an attempt to tamp down the economy, until inflation is moderately above its target rate for a period of time. “We don't mean just tap the base once,” he said. “We want it to be just moderately above 2 percent. So that's what we're looking for.”

The Dow Jones industrial average and the S&P 500 are trading near record levels and more than 900,000 jobs were added last month.