It’s a tune that got old a while ago. Inflation is up yet again in the U.S., according to the most recent report from the Bureau of Labor Statistics. Two things are driving this increase: shelter and gas.
“The index for shelter rose in March, as did the index for gasoline,” said the BLS. “Combined, these two indexes contributed over half of the monthly increase in the index for all items.”
Shelter was up .4% in March and gasoline was up 1.7%, per the report. Overall, the Consumer Price Index increased by .4%, making the increase rate for the past 12 months 3.5%.
According to AAA, gas prices across the country have been creeping up. As of Thursday, the national average per gallon was $3.63, up from the day before, the week before, the month before and last year. Americans consumed approximately 376 million gallons of gas per day last year, said the U.S. Energy Information Administration.
This March, Audacy reported that gas prices were higher on a year-over year basis for the first time since late 2023, citing CNN. Experts said the trend was likely to continue, especially since the Russian invasion of Ukraine is impacting Russian oil supply. The Israel-Hamas War is also impacting oil prices, as well as typical factors such as demand and the switch to summer blend gasoline that prevents evaporation when temperatures are higher, according to CBS News.
As for housing, Zillow data updated this week showed that the median rent in the U.S. was $2,085, an increase of $35 compared to the previous month, but a decrease of $65 year-over-year. Per the most recent data, the median weekly pay for workers in the U.S. was $1,145 in the fourth quarter of 2023. Based on the recommendation that people spend no more than 30% of their income on housing, a person with median earnings wouldn’t be able to comfortably pay for the median rent.
Data from the Federal Reserve Bank of St. Louis showed that median home prices were at about $417,700 as of the final quarter of last year. That’s lower than a peak of $479,500 in quarter four of 2022, but still much higher than the pre-spike average of around $322,000 in the second quarter of 2020.
Bankrate noted in a report released Thursday that “it’s been a wild real estate ride over the last few years,” with interest rates for 30-year mortgages up to 7% today compared to 3% in August 2021.
“As you might imagine, this trend has led to a slowdown in buying activity. Even so, with inventory still scarce, home prices remain unaffordable in many parts of the U.S.,” said the report.
Interest rate hikes are one way The Federal Reserve Bank has tried to bring down inflation. Americans were looking forward to possible rate decreases this year but this recent CPI report may push those back, according to Bloomberg. The Fed is hoping for a 2% inflation rate “over the longer run,” said a March 20 statement.