Inflation accelerated to 8.5% in March, highest since 1981

Inflation hit a fresh 40-year record in March as U.S. consumer prices rose 8.5% from a year ago, the Labor Department said on Tuesday.

The Consumer Price Index, which tracks a basket of goods and services, jumped 1.2% in March after increasing 0.8% in February, showing that inflation gained speed last month. Core inflation, which strips out volatile food and energy costs, rose 6.5% from a year ago.

Nearly half the latest increase in inflation came from the rising cost of gas, which climbed 18% in March to reach a record-high average of $4.33 a gallon. Costs for food and shelter also surged, with airline fares, health and car insurance and furniture contributing to the increase.