A worrisome bout of inflation struck the economy in April, with U.S. consumer prices surging 0.8% and the year-over-year increase reaching its fastest rate since 2008.
The acceleration in prices, which has been building for months, has unsettled financial markets and raised concerns that it could weaken the economic recovery from the pandemic recession.
Wednesday’s report from the Labor Department indicated that the prices that consumers pay for everything from food and clothes to new cars rose at a faster pace than last month’s 0.6% rise. And over the past 12 months, prices are up 4.2% — the fastest rise since a 4.9% gain in the 12 months that ended in September 2008. Excluding volatile food and energy, core inflation jumped 0.9% in April and are 3% over the past 12 months.
After years of dormant inflation, with the Federal Reserve struggling to increase it, worries about rising prices have shot to the top of economic concerns. Shortages of goods and parts related to supply bottlenecks have been a key factor.
Investors have grown increasingly jittery. On Tuesday, with the Dow Jones Industrial Average falling by more than 470 points or 1.4%, its worst day since Feb. 26.
April’s sharp increase in inflation was led by a record 10% surge in the price for used cars and trucks.