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Tuesday, April 12, 2022

The Daily Money: Inflation hits 8.5%, marking new 40-year high

Today's top stories from USA TODAY Money. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
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The Daily Money
ALL THE MONEY NEWS YOU NEED TO KNOW
 
Tuesday, April 12

New to the newsletter? Subscribe to The Daily Money to get the best consumer and financial news from USA TODAY delivered to your inbox every weekday morning. And give our news-inspired Spotify playlist a listen. It features every song quoted here.

Good morning and happy Tuesday, Daily Money readers.  Jayme Deerwester here with you.

🚨 Inflation rises to 8.5%🚨

Consumer prices climbed further into the stratosphere in March and the only consolation is that this painful bout of skyrocketing costs may have peaked.

Inflation hit a fresh 40-year high as continuing surges in gasoline, food and rent costs more than offset moderating used car prices.

The consumer price index leaped 8.5% annually, the fastest pace since December 1981, the Labor Department said Tuesday. That's up from 7.9% in February and inflation now has notched new 40-year highs for five straight months. Prices rose 1.2% from their February level, the sharpest monthly increase since September 2005.

Gasoline prices were the chief culprit, jumping 18.1%. Average unleaded gas set a record $4.33 a gallon last month before easing to $4.11 by Monday, according to AAA. Pump prices were up 48% from a year earlier.

📰 More headlines you can't miss 📰

BEST COMPANIES TO WORK FOR:  Fortune's 2022 list includes Cisco, Hilton, Wegmans, Salesforce and Capital One.

HERTZ FALSE ARRESTS: CEO pledges to 'do right by' false arrest victims over "stolen" cars.

THE END OF KMART? Just 3 stores remain after another closing.

NOT ME LUCKY CHARMS!  FDA investigates reports of illness from cereal.

YOUNG HOMEOWNERS SUCCESS STORY:  How one millennial couple fixed their credit and bought their first home.

🏘 Just how bad is the housing shortage? 🏘

It was previously assumed that housing shortages occurred in only certain regions of the United States, such as the Northeast and Midwest. But now "the underbuilding gap extends across almost every major city in the country," according to a 2021 study, "Housing is Critical Infrastructure: Social and Economic Benefits of Building More Housing," commissioned by the National Association of Realtors.

The report said the housing unit shortfall ranges between 5.5 million and 6.8 million, despite an annual average of 1.5 million new housing units completed in the U.S. and a 1.7 million spike in 2020 alone. "New construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year" to close the gap, the report said. 

"Even if building were to continue at the current level – the most rapid pace in more than a decade – it would still take more than 20 years to close the 5.5-million-unit housing gap," the report said.

💲 5 days until taxes are due 💲

Still haven't filed but looking for a good deal on online tax services?  We did some comparison shopping to see what the big names like TurboTax and H&R Block – and lesser-known players like Cash App and TaxSlayer – are charging for federal and state returns this year.  

The good news is a few are still free, as long as you have a simple return that includes just W2 income, limited investment income and you plan to claim the standard deduction and student-loan debt interest. (Cash App is totally free as long as you only have one state return.)

Otherwise, by the time you factor in the upcharge for state returns, most prices start around $100 for users who own homes or have investment income, $140 for those with investment properties and other assets, and $170 for business owners.

🎧 Mood music 🎧

Today's track, Nirvana's "Heart-Shaped Box," goes out to anyone watching the talking heads on TV argue about how how to fix inflation while they try to figure out how they're to cope with this month's budget shortfall.

"Hey! Wait! I got a new complaint. Forever in debt to your priceless advice."

LISTEN WHILE YOU WORK: You can hear just about every song quoted in the newsletter on the Daily Money Mood Music playlist on Spotify.
U. S. gasoline prices reached an all-time high recently, pushing through the $4 a gallon level to hit $4.17 on March 7. One could argue that the previous peak gas price of $4.11 set on July 18, 2008, was higher when inflation is taken into account. The two dates share something in common. Each was set in a period when crude oil prices topped $100 a barrel. Gasoline prices are increasing not just in the U.S. but in many countries worldwide, and the country where gas prices are soaring is Sudan. ( In the U.S., these are the states where gas prices are rising fastest .) The recent rise in gas prices was relatively sudden. The average price for a gallon of regular nationwide was $2.86 a year ago, according to the American Automobile Association. The price of oil has risen from $58 a barrel a year ago. Oil prices increased mostly due to the current geopolitical situation. Russia's invasion of Ukraine triggered an international boycott of Russian crude. Russia is the third largest exporter of crude after the United Arab Emirates and Saudi Arabia. This, in turn, has lowered supply while global demand has not changed, causing crude prices to spike. Nations have scrambled to find new sources of crude. The situation in the U.K. and Europe is particularly dire because European countries have relied so heavily on Russian oil supplies. The U.S. is a major crude producer, but it will take weeks, if not months, to ship additional oil to Europe. European Union leaders have asked OPEC members to boost production, and at least one, the United Arab Emirates, is open to the idea. However, as is the case with the U.S., this cannot be done overnight. Globally, the oil shortage may last for months. The effects on gas prices by country are radically different. While gas prices have risen by double-digit percentages in some nations from early 2021, prices in other countries, like major oil producers Mexico and Kuwait, have barely budged at all. To find the countries where gas prices are soaring, 24/7 Wall St. reviewed Global Petrol Prices data on gas prices in 135 countries. Countries were ranked by the percent change in the price per gallon of gas from March 1, 2021, to March 7, 2022. Fuel import data for 2020 came from the World Bank. The nation where gas prices have increased the most over that period is Sudan, where gas prices have risen 150%, according to Global Petrol Prices . It is among the countries with the lowest gross domestic product per capita. Several other poor countries are among the countries where gasoline prices have risen fastest, including Afghanistan, Botswana, and Guatemala. Sudan's gas price increase is based on a decision by its government to drop subsidies. Whatever the reason, it is bound to put a significant burden on the nation's residents. ( These are the U.S. states with the highest gas taxes .) Finally, it is worth noting that if the global oil supply continues to be interrupted, the rise in gas prices may not be over.
Inflation hits new 40-year high of 8.5% on soaring gas prices
The inflation rate hit 8.5% annually in March, a new 40-year high, on surging gasoline and food prices. Inflation likely has peaked, economists say.
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