Inflation in the United States is already at a four-decade high, but that hasn’t stopped Goldman Sachs from giving another punch-to-the-gut inflation report.

“The inflation picture has worsened this winter as we expected, and how much it will improve later this year is now in question,” Goldman Sachs economists wrote in a client report over the weekend, per CNN Business.

Worsening Outlook

This sentiment has caused the Wall Street bank to up its inflation outlook. It is now anticipated that the core PCE inflation will slow down to 3.7 percent at the end of this year. But that figure is 0.6 percentage points higher than the previous forecast of 3.1 percent. The Fed has a goal of 2 percent.

Goldman Sachs added that consumer prices should cool off to 4.6 percent by the end of this year and about 3 percent by the end of next year.

The bank also mentioned that the gap between available jobs and workers is the biggest seen in postwar U.S. history, which could “threaten to ignite a moderate wage-price spiral.”

“The initial inflation surge might have lasted long enough and reached a high enough peak to raise inflation expectations in a way that feeds back to wage and price setting,” said the report.

It added that if the Russian invasion of Ukraine causes energy prices to rise or disrupts supply chains, inflation numbers could be ramped up further from already “very high levels.”

Rising Prices at Gas Pump

Meanwhile, the average U.S. price of a gallon of regular-grade gasoline has surged by 10 cents over the past two weeks to $3.64. In just the past week alone, the nation’s average gas price has climbed nearly 8 cents, according to new data compiled by GasBuddy. Diesel prices are up about 6 cents over the same period. The national average is higher by 23.2 cents from a month ago and 87.6 cents compared to a year ago.

Nationwide, the highest average price for regular-grade gas is in California’s Bay Area at $4.86 per gallon. “The Russian invasion of Ukraine has sparked concern that oil production could eventually be stifled, or even sanctioned, from the world’s second-largest oil producer, leading to less supply as demand grows,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement.

“That possibility has pushed up the national average price of gasoline considerably in the last week, and the situation could worsen at any time, keeping gas prices elevated for the foreseeable future,” he continued.

De Haan added that gas prices could potentially tack on another 25 cents to 75 cents ahead of the busy Memorial Day driving period.

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.