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The last time the 12 month–average inflation rate was below 5% was in April 2021, when it was 4.2%, according to U.S. Labor Department data. In March 2023, it sank to 5% for the first time since May 2021.
Consumer prices sharply declined at the start of the pandemic due to lower demand for goods and services. As consumer demand rebounded, the U.S. inflation rate hit a four-decade high 7.9% in February 2022. The Russian invasion of Ukraine further boosted the cost of food and fuel, prompting inflation to peak at 9.1% in June 2022. It has fallen every month since. The government’s target rate is 2%.
March’s lower inflation rate reflects several factors: Food prices remained about the same, energy prices fell, but housing prices continued to rise.
An economist writing in April for the World Economic Forum website said today’s inflation is a global phenomenon — not caused by any one country or leader — and warned of a “period of permanently higher inflation”
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