Food, gas prices soar, while core inflation remains subdued

Food and gas prices soared last month, leading to the biggest spike in the Consumer Price Index since the recession ended. The U.S. Department of Labor has revealed that the prices increased in March by 0.5 percent. Compare to last year, the prices have jumped 2.7 percent, the biggest increase since December 2009.

With gas prices now averaging above $4 per gallon in several states, including Illinois, drivers are already cutting back. Despite the drop in consumption, the government still anticipates that prices will continue rising in the coming season. Gas prices have not been this high since the summer of 2008.

Meanwhile, core inflation, which ignores the volatile food and gas markets, only rose by 0.1 percent in March, much lower than the 10-year average of 1.9 percent. The annual inflation rate remained at a 1.2 percent, up from 0.6 percent seen in October 2010.