Inflation rose at fastest pace in 40 years in March as consumer prices jumped 8.5%

Consumer prices climbed further into the stratosphere in March, and the only consolation is that the 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 prices for used cars.

The consumer price index leaped 8.5% annually, the fastest pace since December 1981, the Labor Department said Tuesday, likely cementing Federal Reserve plans for an unusually large half-point interest rate hike early next month.

That increase is 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.

What causes inflation? Gasoline prices were the chief inflation culprit, jumping 18.3% and accounting for more than half the overall rise in cost

Average unleaded gas set a record $4.33 a gallon last month before easing to $4.11 by Monday, according to AAA. Pump prices are up 48% from a year earlier.

worker shortages in the U.S. are prompting companies to boost pay sharply to attract job candidates, leading them to lift prices to maintain profit margins.