U.S. inflation rate leaps to 8.5%, CPI shows, as higher gas prices slam consumers

The rate of U.S. inflation topped 8% in March for the first time in more than four decades and showed little sign of easing up, explaining the new-found urgency at the Federal Reserve to quickly undo its easy-money strategy.

The consumer price index jumped 1.2% in the month, driven by the higher cost of gasoline, food and housing,  the government said Tuesday. It was the largest monthly gain since Hurricane Katrina in 2005.

The increase exceeded Wall Street’s forecast of a 1.1% advance.

The rise in the cost of living has been hitting new highs for months. The rate of inflation in the past year moved up to 8.5% in March from 7.9%.

The last time inflation breached 8% was in January 1982, when Ronald Reagan was president.