{"id":29234,"date":"2022-04-12T00:25:00","date_gmt":"2022-04-12T00:25:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=29234"},"modified":"2022-04-23T14:40:34","modified_gmt":"2022-04-23T14:40:34","slug":"soaring-energy-costs-fuel-fastest-inflation-in-40-years-3-essential-reads","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/soaring-energy-costs-fuel-fastest-inflation-in-40-years-3-essential-reads\/","title":{"rendered":"Soaring energy costs fuel fastest inflation in 40 years: 3 essential reads"},"content":{"rendered":"\n<p><a href=\"https:\/\/theconversation.com\/us\/team#bryan-keogh\">Bryan Keogh<\/a>, <em><a href=\"http:\/\/www.theconversation.com\/\">The Conversation<\/a><\/em> and <a href=\"https:\/\/theconversation.com\/us\/team#matt-williams\">Matt Williams<\/a>, <em><a href=\"http:\/\/www.theconversation.com\/\">The Conversation<\/a><\/em><\/p>\n\n\n\n<p>Inflation continues to surge at the fastest pace since the early 1980s, placing more pressure on the Federal Reserve to lift interest rates.<\/p>\n\n\n\n<p>The consumer price index, a broad measure of prices of goods and services in the U.S. economy, <a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\">climbed 8.5%<\/a> in March 2022 from the same time a year earlier, led by the soaring price of energy, according to the Bureau of Labor Statistics. That\u2019s the highest level since 1981, the last time the Fed was caught in a ferocious battle to tame inflation.<\/p>\n\n\n\n<p>Here are three recent stories we\u2019ve published that put the rise in prices in context.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-datawrapper wp-block-embed-datawrapper\"><div class=\"wp-block-embed__wrapper\">\n<iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" title=\"Soaring inflation\" src=\"https:\/\/datawrapper.dwcdn.net\/6T5Sl\/3\/#?secret=cjo9dQKzLO\" data-secret=\"cjo9dQKzLO\" scrolling=\"no\" frameborder=\"0\" height=\"400\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2>1. Oil is in everything<\/h2>\n\n\n\n<p>When inflation first began accelerating about in early 2021, the main culprit was pandemic-related supply chain problems. But now, it\u2019s overwhelmingly the war in Ukraine, which has roiled energy markets and threatened supplies, causing oil prices to spike. In the U.S., energy prices <a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\">jumped 32% in March 2022<\/a> from a year earlier.<\/p>\n\n\n\n<p>That\u2019s a big problem for the economy because <a href=\"https:\/\/theconversation.com\/soaring-crude-prices-make-the-cost-of-pretty-much-everything-else-go-up-too-because-we-almost-literally-eat-oil-179809\">virtually everything we buy or consume<\/a> requires energy, explains <a href=\"https:\/\/scholar.google.com\/citations?user=GyTN5PYAAAAJ&amp;hl=en&amp;oi=ao\">Veronika Dolar<\/a>, an assistant professor of economics at SUNY Old Westbury.<\/p>\n\n\n\n<p>\u201cIn my economics classes, I like to joke to my students that we eat petroleum,\u201d she writes. \u201cStudents have a hard time imagining drinking crude oil or gasoline, but in fact it\u2019s both figuratively and almost literally true.\u201d<\/p>\n\n\n\n<p>Oil powers the ships and trucks that move our packages around the world, becomes the plastics that go into apparel and packaging, and is even in some of the food we eat, such as cookies and pizza.<\/p>\n\n\n\n<h2>2. Poorest paying the biggest price<\/h2>\n\n\n\n<p>Rising prices of meat and veggies at your local grocery stores and gas at the pump affects everyone, of course. But they impact some consumers more than others.<\/p>\n\n\n\n<p>In fact, Americans who earn the lowest incomes are seeing prices rise at a significantly higher pace than the richest. <a href=\"https:\/\/theconversation.com\/inflation-inequality-poorest-americans-are-hit-hardest-by-soaring-prices-on-necessities-174853\">This gap is explained<\/a> by something known as inflation inequality, which explores the different spending habits of each group, writes <a href=\"https:\/\/scholar.google.com\/citations?user=I4dDKMsAAAAJ&amp;hl=en&amp;oi=ao\">Jacob Orchard<\/a>, who is a doctoral candidate in Economics at the University of California San Diego. The poorest spend a lot more of their incomes on energy and food, which are the categories climbing the most right now.<\/p>\n\n\n\n<p>\u201cIn times of economic uncertainty and recession, most households tend to hold back on buying luxury goods,\u201d he notes. \u201cBut by and large, people can\u2019t cut down on necessities such as groceries and heating \u2013 although wealthier consumers are better placed to stock up on these necessities when prices are cheap.\u201d<\/p>\n\n\n\n<h2>3. Why the Fed won\u2019t bring down inflation \u2013 soon<\/h2>\n\n\n\n<p>It is the Federal Reserve\u2019s job to do something about the problem of surging prices. And interest rates are the main way the Fed can bring down inflation.<\/p>\n\n\n\n<p>The Fed does this by hiking interest rates, as it did in February 2022, which increases borrowing costs for companies and consumers throughout the economy. The aim is to slow economic activity, which should cause inflation to cool off.<\/p>\n\n\n\n<p>\u201cThe challenge for the Fed is to do this without sending the economy into recession,\u201d explains <a href=\"https:\/\/scholar.google.com\/citations?user=ZLZnpZYAAAAJ&amp;hl=en&amp;oi=ao\">Jeffery S. Bredthauer<\/a>, an associate professor of finance, banking and real estate at the University of Nebraska Omaha.<\/p>\n\n\n\n<p>If the Fed raises rates by too much and too fast, it could act like slamming on the brakes while driving on a highway. That risks what economists call stagflation, Bredthauer writes, which is a terrible brew of high inflation and a stagnating economy.<\/p>\n\n\n\n<p>But because the biggest factors influencing inflation are outside of the Fed\u2019s control \u2013 namely, the war in Ukraine and the global shortage of goods \u2013 <a href=\"https:\/\/theconversation.com\/why-the-fed-cant-stop-prices-from-going-up-anytime-soon-but-may-have-more-luck-over-the-long-term-179339\">it will be almost impossible<\/a> for the central bank to bring inflation down anytime soon, he explains.<\/p>\n\n\n\n<p>[<em>Get the best of The Conversation\u2019s politics, science or religion articles each week.<\/em><a href=\"https:\/\/memberservices.theconversation.com\/newsletters\/?source=inline-best\">Sign up today<\/a>.]<\/p>\n\n\n\n<p><a href=\"https:\/\/theconversation.com\/us\/team#bryan-keogh\">Bryan Keogh<\/a>, Senior Editor, Economy + Business, <em><a href=\"http:\/\/www.theconversation.com\/\">The Conversation<\/a><\/em> and <a href=\"https:\/\/theconversation.com\/us\/team#matt-williams\">Matt Williams<\/a>, Breaking News Editor, <em><a href=\"http:\/\/www.theconversation.com\/\">The Conversation<\/a><\/em><\/p>\n\n\n\n<p>This article is republished from <a href=\"https:\/\/theconversation.com\">The Conversation<\/a> under a Creative Commons license. Read the <a href=\"https:\/\/theconversation.com\/soaring-energy-costs-fuel-fastest-inflation-in-40-years-3-essential-reads-181140\">original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bryan Keogh, The Conversation and Matt Williams, The Conversation Inflation continues to surge at the fastest pace since the early 1980s, placing more pressure on the Federal Reserve to lift interest rates. The consumer price index, a broad measure of prices of goods and services in the U.S. economy, climbed 8.5% in March 2022 from [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":29235,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[10996,3517,2275,11642,1038,865,234,11411,348,11014],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/29234"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=29234"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/29234\/revisions"}],"predecessor-version":[{"id":29336,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/29234\/revisions\/29336"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/29235"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=29234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=29234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=29234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}