Just as the ongoing supply chain problems have many causes, they also have many aftereffects, one of which is rising inflation. And in March, the continuation of too many dollars chasing after too few goods pushed the Consumer Price Index to fresh heights, dealing a blow to business owners' and consumers' already stretched budgets.  

The Consumer Price Index in March rose 8.5% on a year-over-year basis, according to newly released data from the Department of Labor. Additionally, the CPI grew a seasonally adjusted 1.2% from the previous month, a notable uptick from the 0.8% gain seen in the February report.

With the 8.5% gain, this latest CPI report is the sixth consecutive month in which inflation has been at or above 6%, The Wall Street Journal pointed out.

The biggest contributor to the latest surge in prices is the cost of fuel, the report said. Indeed, the gasoline index jumped more than 18% in March from 12 months earlier. The food index, meanwhile, elevated approximately 1% over the same period.

Increasing what they charge is often the last resort for businesses that are spending more to stay afloat, as they prefer to opt instead for alternative cost-cutting strategies wherever possible, such as staffing cuts or applying for a loan. But it's been unavoidable for the vast majority of both small and large organizations over the past year. In the past 12 months, fully 66% of small businesses have been forced to increase prices on the services and goods they sell, according to a quarterly report from the U.S. Chamber of Commerce.

Added supply helped dealers rein in new and used car prices.Added supply helped dealers rein in new and used car prices in March. 

Slight dip in month-over-month inflation
But the latest CPI report wasn't all bad news. When excluding the cost of food and energy — meaning core inflation — prices climbed 0.3% in March, the Labor Department reported. In February, the same measure was 0.5%.

As for why core inflation slowed down, falling car prices likely represent the main reason, according to Fitch Chief Economist Brian Coulton in an email to CNN. Blerina Uruci, an economist at T. Rowe Price, told The Wall Street Journal that with automobiles being the exception, prices are higher for just about everything else.

"To me, this is a red flag," Uruci explained. "The other red flag is Russia's invasion of Ukraine and the rise of COVID in China. "Those pose risks that the so-called normalization of supply chains takes longer to materialize."

While economists are at odds as to how to resolve inflation and when prices will finally start to pull back, many agree that supply chain disruptions were the tipping point. From how the COVID-19 lockdown diminished production to the dramatic surge in demand fueled by government stimulus spending, a severe shortage of products forced businesses to raise their prices.

So long as the supply chain interruptions remain problematic, inflation will likely remain a theme for the economy for the foreseeable future. Indeed, economists suspect it will be "uncomfortably high" for the rest of the year, according to a WSJ poll.

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