Consumer prices rose in March, driven by a strong economic rebound and year-over-year comparisons at a time when the Covid-19 pandemic was set to slow the U.S. economy, the Department of Labor reported Tuesday.

The consumer price index rose by 0.6% compared to the previous month, but by 2.6% compared to the same period of the previous year. The year-on-year increase is the highest since August 2018 and was well above the 1.7% recorded in February.

According to estimates by Dow Jones, the index is expected to rise by 0.5% per month and by 2.5% from March 2020.

Gasoline prices were the largest contributor to monthly earnings, up 9.1% in March, accounting for about half of the total rise in CPI. Gasoline is up 22.5% year over year, which is part of a 13.2% increase in energy prices.

Groceries also rose 0.1% over the month and 3.5% over the year. The “Food-at-Home” category rose by 3.3%. All six government-measured grocery store indexes rose, with the largest increase of 5.4% in the meat, poultry, fish and eggs category.

Food that was not at home increased 3.7%, while “reduced service meals”, which include pick-up, take-away and delivery restaurants, increased 6.5% over the year. This was the largest annual increase in the survey’s history since 1997.

Markets reacted modestly to the news, with stock futures falling from their lows for the morning but still pointing to a negative open. Government bond yields were largely unchanged.

This strong year-on-year increase resulted from what economists call the “base effect”, or the lower comparative level. In March 2020, the government had just started a massive shutdown of U.S. businesses that would ultimately see more than 22 million Americans at the unemployment line.

The core CPI, which excludes volatile food and energy costs, rose 0.3% monthly and 1.6% year over year.

While inflation numbers are high, many Federal Reserve economists and policymakers expect the spike to be temporary. April is likely to climb sharply as well, but then the numbers should decline as the worst months of the shutdown fall out of the data comparisons.

Fed officials have said they will not adjust policy based on short-term jumps in inflation levels. Chairman Jerome Powell told CBS ‘”60 Minutes” in an interview broadcast on Sunday night that he did not expect any rate hikes this year.

Still, markets have priced in higher growth and inflation, with government bond yields rising to their highest level since the pandemic. The economic reopening and unprecedented government support add to the inflationary environment.

Fed officials see GDP growth of around 6.5% this year, which would be the fastest increase since 1984.

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