Employers' compensation costs were rapidly rising at the start of the year, and consumer goods prices continued to rise in March, according to new data that showed inflationary pressures remained in the US throughout the winter.

The Employment Cost Index, which measures how much employers pay for their employees' wages and benefits, increased 1.4 percent in the first quarter and 4.5 percent year on year.

In March, the personal consumption expenditures price index increased by 0.9 percent, or 0.3 percent when volatile food and energy were excluded.

In March, core PCE inflation was 5.2 percent year on year, down from 5.3 percent in February. That is the key inflation indicator that the Federal Reserve monitors, with the goal of keeping it around 2%.

Core PCE did not accelerate in March, rising by 0.3 percent, as it had in February. The good news is that inflation did not accelerate last month when energy and food prices are excluded.

However, a surge in energy prices linked to the war in Ukraine in March pushed overall inflation up sharply to 6.6 percent for the fiscal year ended in March, up from 6.3 percent in February. As a result, it set a new four-decade high.

According to the ECI, employers are paying significantly more to their employees, implying that wage pressures are building and will eventually cause companies to raise the prices they charge consumers.

The index takes into account both wages (up 1.2 percent in the first quarter alone) and benefit costs (up 1.8 percent), capturing the full extent of what businesses must pay to attract and retain workers.

The 4.5 percent year-over-year increase in the index is the highest since data began in 2002, and it was higher than the 4.3 percent analysts predicted.

Whether higher wages and benefits cause a surge in labor-intensive service prices, even as supply chain problems for physical goods begin to ease and prices stabilize. According to the new ECI figures, this is a significant risk.

Higher wages and benefits costs, combined with the aftereffects of the March surge in energy prices, are likely to keep inflationary pressures at bay across the economy.

Earlier, US media reported that families across the US are dealing with an increasing scarcity of baby formula. 

It is worth mentioning that many experts believe that "Bidenflation" (a portmanteau for "Biden" and "inflation") is crippling the US economy and causing severe supply shortages, not to mention affecting people’s personal finance.

This comes as Biden faces new challenges and a divided public, with his foreign and economic policies seen as a direct cause of instability across the globe.